I’ve talked about this before but recently have been seeing some “deals” that aren’t as great as they seem and felt the need to re-say this.  Coupon Math is an odd math.  In Coupon World a $10 item is “free” when you pay $10+ tax at the register and get $10 in store rewards back.  I try VERY hard to ensure if I say a deal like that is “free” I say “after rewards” and I know sometimes in my haste to bring you a deal I will fail & for that I apologize and that’s why it’s very important that my MSM friends understand Coupon Math.

Here’s a deal similar to one I saw in Coupon World today:

Transaction #1:
Bought Product X
Used a Coupon
Used $5 store rewards from last week
Paid $5 OOP
Got $5 store rewards= FREE

Transaction #2:
Bought Product Y
Used a Coupon
Used $5 Store rewards from previous transaction
Paid $5 OOP
Got $5 Store rewards= FREE

I got BOTH products FREE!

That math just doesn’t add up!  They paid $10 for these products and ended up with $5 in rewards!  They counted the rewards they used AND the rewards they received.   With coupon math we need to be consistent- either count your rewards when they are used OR when they are received but you cannot count them both times- that’s double counting and doing ourselves a big disservice.  We’re spending more than we think we are but in our calculations we think we are getting a great deal.

Since I like to focus on what I SPEND rather than what I SAVE- I prefer to calculate my rewards when they are used- because that is when they are beneficial to me.  That’s when they make a dent on my spending.

Each week I write a Tuesday Totals where I keep track of my SPENDING, it helps keep me on track. My “oop” (out of pocket) never calculates in the rewards earned.I will note that I earned them but they are not included in the amount I spent nor the amount “saved”.   What comes out of our pocketbooks is much more important than any amount saved- in my classes I always say that I could “save 99% on a 1,000,000 purchase- that sounds great right!  But then do the math & realize I just spent $10,000! Doesn’t sound so great does it?” What we spend is much more important than what we save.

My point is – be consistent.  If you want to calculate rewards when earned- stay that way.  If you want to calculate them when redeemed- stay that way.  One warning about calculating rewards when earned: rewards often expire, get lost or forgotten.  So a “free” item after $5 reward really isn’t “free” if that $5 reward gets lost and you cannot use it.  That’s one reason it’s better for me to calculate them when redeemed- if it’s lost it’s never been used to make a “free” deal – I still lost the money but it doesn’t throw off my balance.  I treat rebates the same way- I calculate them when they are received not when I fulfill them.

Which way do you prefer- counting when redeemed or when earned?