Coupons Make A Comeback Amid Downturn Some economists argue that Americans are getting thrifty just when they need to be spending more: Coupon redemptions grew by 27 percent in 2009, and for the first time in a calendar year, surpassed a billion dollars in printed coupon savings. But frugality in America is nothing new.

Coupons Make A Comeback Amid Downturn

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Recovered from Black Friday yet? Well, get ready for Cyber Monday. Retailers certainly are. Store traffic was up strongly on Friday, more than 2 percent according to the research firm ShopperTrak.

But sales were just barely ahead of last year, which means on the biggest shopping weekend of the year, bargains ruled.

Mr. HOWARD DAVIDOWITZ (Retail Analyst): People are responding to anything that they believe gives them a leg up on price.

CORNISH: That's retail analyst Howard Davidowitz. He says there's been one big retail loser this season.

Mr. DAVIDOWITZ: Now let's take Wal-Mart. They're in the tank. They are 11 percent of United States retail sales. There (unintelligible) store sales have been down six straight quarters. Why is that, if people are down-trading? Because Wal-Mart are getting killed by Dollar General, Family Dollar, Dollar Tree, Aldi. They're being undersold by extreme-value retailers. Americans are watching every penny.

CORNISH: And when people are pinching pennies, there's one tool in particular that comes in handy: the coupon. But you have to know how to use it, and that's where two women from Tennessee come in.

Kelly Thompson and Kasey Trenum are founders of the thrifty website Time 2 Save. Thompson and Trenum were stay-at-home moms with families working in the construction industry. When the housing bubble burst, so did their family finances. That's when they turned to coupons.

Were you coupon cutters before?

Ms. KELLY THOMPSON (Co-Founder, Time 2 Save): This is Kelly. And I did grow up with my mom using coupons, and we would cut them up. I remember her telling me not to cut the carpet because it was shag carpet, and it was really long and bright orange. And I would try not to cut it.

And she would spread out all the ads from the sales for the stores that week, and then we would match up the coupons. And there definitely was a stigma. That is it was like I don't want to be the crazy coupon lady.

And so I would use them here and there. But honestly, I had that mindset of, okay, I saved $1.50, woo-hoo.

(Soundbite of laughter)

Ms. THOMPSON: What was the big deal behind it? And it just didn't make sense. Looking back now, I can see I just didn't understand how to use coupons effectively.

Ms. KASEY TRENUM (Co-Founder, Time 2 Save): And this is Kasey. And, no, I did not. Every once in a while, I would think, you know, I'm going to try it this month. And I would cut out a coupon and put it in my purse, and I would never see it again, or if I did happen to use it and it saved, you know, 35 cents, it just made no sense to me.

But you can only cut out so much of other parts of your life before you have to start getting desperate and looking for another way.

CORNISH: So you two get in on the whole couponing thing to the point where you're able to teach a class. Tell me, what was that first class like?

Ms. TRENUM: We went into that group, thinking there were supposed to be like 25, 30 people there. That morning, we had over 200 men and women show up. And that initial inspiration was what prompted us to take it to the next level of really putting this together into a business-type model.

CORNISH: And you know, ladies, I have to admit, I, too, have an abandoned coupon accordion file in my kitchen drawer. I remember sitting one day and telling my husband, you know, today's the day with the paper. And I'm clipping just like I did when I was a kid. I want to say I grew up using coupons.

What are some of the things you teach people to help them go from that abandoned accordion file to actually making good and helpful-to-their-household use of coupons?

Ms. TRENUM: Well, this is Kasey. And first of all, we have to teach them an entire different way of shopping. You know, like, how do you decide what goes on your grocery list every week, Audie?

CORNISH: I go through the fridge and look for what's empty, and then I just, like, write that down, basically and replace that thing.

Ms. TRENUM: Right, and that's what we all do. But the problem with that is that there is a grocery store sale cycle. And so when we shop out of what we need, we're chained to that. And so what we teach is that you buy out of what you use, not out of what you need.

And the great thing about that is that on our website, we match up the grocery stores with the coupons and give you the final price. Just for example, peanut butter for 16 cents. That's a very reasonable price. If I didn't need peanut butter, that doesn't matter. I use peanut butter. And so I would buy it at 16 cents to last me until the next sale cycle.

CORNISH: But doesn't this mean that you're going to hit a week where you get a bunch of stuff that you use but don't actually need, and then, like, stuff you actually need, you won't have bought?

Ms. TRENUM: Well, it's a process. You do start with a must-have list, but what you will notice is that your must-have list goes down because you start having those things. And that is what makes your grocery bill go down.

CORNISH: That's Kasey Trenum and Kelly Thompson. They run a coupon business together called Time 2 $ave, in Tennessee. Kasey, Kelly, thank you for doing it, and rest assured you do not sound like crazy coupon ladies.

Ms. THOMPSON: Oh, we are not. We tell the people in our classes, do not be the crazy coupon lady. Because at the end of the day, I am so much more than going to the grocery store. But so often, so many of these couponing ladies, they just go bananas.

CORNISH: Coupon use surged last year. Redemptions were up 27 percent over 2008. And those little icons of cheapness have a rich history, starting back in 1887. That's when a businessman in Atlanta named Asa Candler purchased the formula for Coca-Cola.

I heard the story from author Lauren Weber, who's written about the history of American frugality.

Ms. LAUREN WEBER (Author, "In Cheap We Trust: The Story of a Misunderstood American Virtue"): He was trying to get people to try this new beverage. And the only way he could figure out to lure people to trying something they'd never had before was to print millions of coupons for it.

And his strategy apparently worked because within a few years, Coke was available in every state in the nation.

CORNISH: Now, when are coupons popular?

Ms. WEBER: Well, not surprisingly, the time when they're most popular is when people are hurting. And they really gained in popularity during the Depression, not surprisingly. People were looking for every way they could to save money. At the same time, stores and manufacturers were looking to get consumers to part with some of their money. And so it was a nice dovetailing of motivations there.

CORNISH: And you wrote a whole book about living cheaply. And I have to ask, do you use coupons?

Ms. WEBER: I actually don't. They're often available for processed foods or for things that I don't necessarily eat, things that I don't necessarily need. And so I tend to stay away from them. I think that often, coupons become an incentive to buy things you wouldn't normally buy.

Now, on the other hand, people who are very strategic about coupons, who combine the coupons with items that are on sale, they really can save a lot of money. But as with most things involved in saving money, if you really want to put some time into it, you probably can use coupons to save a lot. I just choose not to put my time into that.

CORNISH: The popularity of coupons really was quite high in the early '90s, and then it sort of tapered off, and now we're seeing it leading with this social-networking-based coupons, websites like Groupon, where you get other people involved so you all can save, or even just digital coupons, holding it up at the cash register, your cell phone, and getting some amount of money off. Is this something that's going to carry the tradition of coupons forward?

Ms. WEBER: Yes, I think so. I think the Internet has totally changed the way that people use coupons. For one thing, now it's not just the serendipity of finding something in your local Sunday circular. Now you can go online and find a coupon for almost anything.

And I think, you know, just with sites that you mentioned like Groupon, they are finding new and innovative ways to encourage people to use them, and I think we'll see that continue.

CORNISH: Coupons, and also the whole idea of being frugal, I feel like fall in and out of favor. And sometimes there's a stigma, depending on the period of history. Do you see this current trend of frugality outlasting the recession?

Ms. WEBER: Well, that's a good question. My book covers about 200 or 300 years of the history of cheapness and frugality in America. And the one thing that really struck me is that, you know, we have this idea that America was once a frugal nation, and now we're over-spenders.

And what I found instead is that this is a cyclical virtue. We cycle in and out of respecting frugality as an American value. And so, you know, clearly, we're in an up-cycle for thrift right now. And the question of whether or not this is going to last is something I've thought about a lot.

You know, chances are as soon as the crisis, which right now is high unemployment and a recession, passes, people tend to reset their appetites a notch or two higher than they were before.

But the thing that's different this time around is I think coupled with not only a greater appreciation for frugality is also, you know, a sort of higher environmental consciousness, a sense that maybe we don't have unlimited natural resources to fuel our consumer spending.

And so I think if anything, that is going to prolong this interest in frugality and reducing, reusing, recycling and that kind of thing because of course, those two things are very deeply related.

CORNISH: That's Lauren Weber. She wrote the book "In Cheap We Trust." Lauren Weber, thanks so much for talking with us.

Ms. WEBER: Thanks for having me.

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