Coupons, Groupon & the hunt for bargains

Many Canadian retailers won’t accept online discounts, managers say

A staff member at the Princess Street Metro says she doesn’t see students using coupons but isn’t sure why.
A staff member at the Princess Street Metro says she doesn’t see students using coupons but isn’t sure why.
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At first, it doesn’t seem worthwhile. I covered my kitchen table in flyers and newspapers and sifted through them for a way to save $1.80 on milk.

This was my introduction to couponing.

It’s a ruthlessly competitive activity that has captured the attention of soccer moms, students and celebrities alike.

Retail outlets have always provided customers with certain discounts and rebates, but the systematic use of coupons as an aggressive money-saving tactic has gained popularity in recent years.

The Wall Street Journal dubbed the practice as “the Newest Extreme Sport” in a 2010 article.

In the article, Timothy W. Martin suggests that extreme couponing gained prominence in the U.S. after the 2008 recession.

According to coupon-processing company Inmar Inc, 3.3 billion coupons were redeemed in 2009, as opposed to 2.6 billion in 2008. The 27 per cent increase is the largest yearly jump since the company started recording the statistics over a decade ago.

Despite the wide prevalence of couponing, certain discount-hunters have garnered a stigma in popular culture — primarily the result of TLC reality show Extreme Couponing.

I was initially confused why couponing isn’t a bigger phenomenon in Canada. While many of Canada’s major grocery outlets don’t accept online coupons, there’s huge potential for in-store savings.

If you shop smartly, your savings will accumulate.

FreshCo is known for its regular discounts, so I took advantage of the advertised in-store discounts on a recent shopping trip.

Using coupons I found in flyers I hunted down the items on my short shopping list. I saved $14.12 on a nearly $35 bill. While it doesn’t seem significant, it adds up and wasn’t too time-intensive. I spent ten minutes organizing my coupons.

If you go the coupon route, be prepared to end up with items you don’t need. I now have Kleenex in bulk.

It’s more effective when buying groceries for a large family, as discounted items often come in large quantities.

Customer Service Manager of FreshCo Rachel Mooney agreed.

Because couponing often provides deals on items in bulk, Mooney said most of FreshCo’s couponers are people who come into the store with coupons for large families.

“We don’t have many people using plenty … just the odd person.”

Mooney said she doesn’t think couponing is as big a phenomenon in Canada as it is in the U.S.

“In Canada there’s a lot of limits on things,” she said. “We don’t accept Internet coupons. If you print them off yourself, we can’t process them.” This doesn’t affect competition with other stores though.

“I’ve heard customers say Wal-Mart takes [Internet coupons], but most other grocery stores don’t,” she said. “We’ve never had anyone use Groupon.”

FreshCo accepts coupons from Save.ca and Websaver.com. These websites supply coupons for a wide range of grocery items and mails them to customers.

Both FreshCo and Metro have a similar lack of student enthusiasm when it comes to couponing — something Metro employee Kathryn Jennings doesn’t understand.

“If you can get just a buck off, it’s worth it.”

Couponing isn’t just seen in grocery stores, though.

Groupon was launched online in 2008, offering daily deals on products and restaurants. It now has 50 million users.

For Franselly Hair Design and Spa, a salon on Wellington Street, Groupon meant a boost in business.

According to Ashley Vanderhal, who works at the salon, three coupons have been offered through the popular website.

Last week, they sold 300 coupons advertised on Groupon.

For $12, the coupon provides a men’s cut, plus wash, style and scalp massage — a $25 value.

For $25, Franselly Hair Design and Spa offered a women’s cut, plus wash and style — a $50 value. For $45, customers could get $100 worth of colouring services.

The coupon expires in a year.

While Groupons may not initially appear to be profitable to businesses, they can be advantageous.

“You’re getting new people to a new place. If they like it you can get a repeat client, and they can bring in new people,” Vanderhal said. “They’re definitely helpful … we’ve had quite the rush.”

It isn’t the case for every business, though.

The effects of Groupon can be overwhelming on small businesses, as seen with the mass purchase of a coupon for Posies Café, a small coffee shop in Portland, Ore. in 2010.

Groupon allowed customers to pay $6 for $13 worth of products. Over 1,000 were purchased, flooding the establishment for three months. The owner admitted to having to pay an additional $8, 000 to her staff to accommodate the increase in traffic.

Steve Nikitopoulous, co-owner of Campus One Stop, said he wouldn’t use Groupon for his business.

While the site is good for advertising, it doesn’t present many other benefits, he said.

“It’s good for exposure, but you don’t make money from Groupon.”

According to Nikitopoulous, certain couponing websites may attract customers, but they don’t present an effective business model to owners.

“With sites like Ethical Deal, Team Buy … they have steady customers but they’ll run out of people,” he said. “I don’t know anyone who’s used a Groupon more than once.”

Moreover, Campus One Stop doesn’t have a merchant than can process online coupons.

“We have no way of validating them,” he said. “But we’ve designed our own coupons.”

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