There is a lot of confusion on how to determine the deals, not only from customers and retailers, but the online deal community, too. This post is not intended to offend anyone or their way of thinking, but to educate my readers as to the full potential (or lack thereof) of their savings.
Rule #1. Do your own math.
I read a handful of deal blogs each day, and I’m sure my readers do the same. Even I get confused as to how some of these bloggers get their final prices, and I’m an accountant. Many are just basic math errors, but I tend to over analyze them just in case I’ve missed a detail. The sad thing is that I see this on many of the biggest blogs. Of course, everyone makes mistakes- but those should be few and far between, not in nearly every post.
Always, always, do the math yourself before heading out. An error of 20¢ can be enough to raise your totals tremendously- not to mention cause you to buy something that you might not have otherwise.
Rule #2. Understand what out of pocket really is.
Out of Pocket is the amount of cash you hand over during the transaction. If an item is $1 after coupon, and you fork over $1- that is your OOP expense. Sounds pretty simple, huh?
OK- here’s where I see all of the confusion. Say that you buy 4 of the $1 item in order to receive a $5 catalina. Many will say that makes your OOP $-1. How is that possible when you’ve handed them $4? True, you are exchanging that $$ for store cash, but you still spent it. If you were to Walgreens and buy a $25 Olive Garden gift card, was it free? NO- you spent $25 to get it. $25 left your pocket and went into theirs.
What if you roll that deal into another one? I can’t say how annoying this is to me! If you’ve messed up on the first one and said that it actually cost you $-1, you are going to mess up on the 2nd one and say that it cost you $-1 also. That would mean that they have paid you $2 to buy these items- but what about the $4 you initially spent? Many don’t account for that! This might not amount to a large margin of error if you are shopping at a store where the deal rolls (you can pay for identical items that generate the same reward with that reward), but what if you are shopping at Walgreens or somewhere that the promotion isn’t rolling?
Let’s say a lotion is on sale at Walgreens for $3.99, but you get a $3.99 Register Reward with purchase, making it ‘free’. The item may seem free after the RR, but you have forked over cash to get this item. In order to redeem the RR, you are going to have to purchase 2 items (one filler) that equal $3.99 or higher. Chances are that this is something that would be cheaper elsewhere or something that you didn’t really need that badly.
If you want.. say.. 4 ‘free’ lotions, it’s going to cost you $16 OOP! If you have other purchase to be made at Walgreens, you’re sitting pretty- but it still cost you OOP.
When you read matchups, it might look something like this:
Follow these transactions in order:
Transaction 1:
Lotion: $3.99
-$3.99 RR
=FREE
Transaction #2:
Shampoo: $3.79
Pencil: $.20
-$3.99 RR
= FREE
So the total for both of these transactions is absolutely nothing? But you handed over $4…
Transaction #1 should read like this:
Lotion: $3.99
Receive a $3.99 RR with purchase
=$3.99 OOP + $3.99 RR
To avoid mistakes at the checkout or overspending your budget, you should always know how to compute your own deals and how to decipher those you might find elsewhere. Never forget that if cash leaves your pocket, it does not return in the form of cash!
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{ 2 comments… read them below or add one }
Thanks, Alicia!! I have to agree with you on some people’s way of thinking. I’m sure there’s been a whole of confusion and disappointments along the way.
Great article, Alicia! I am reluctant to purchase a lot with coupons and register rewards that still cost me a lot out of pocket initially. It can add up quick and you get a false sense of ‘reward’.