Wednesday, December 29, 2010

TLC's new Extreme Couponing series....

...was pretty interesting, as someone who is more familiar than most with coupons (and couponers).  I suppose you don't get to be on the show unless you're "extreme", so that might explain some of this, but I couldn't stop thinking about how much effort and stuff was ultimately being wasted.

I'm a professor.  Let me explain this academically.  There's a concept in economics called "marginal utility".  In a nutshell, it asks, "What is the value (to me) of one additional unit?"  For example, I like ice cream, but I don't want a truckload.  At some point, the marginal utility of additional "units" of ice cream is actually negative.  Give me the truckload, and it's going to melt on my lawn and look like the morning after a high-school party.  Or I'm going to have to buy a couple of additional freezers to store it all.  Or I'm going to have to run around and post signs for all my neighbors and friends to come and get it while it lasts.  Any way you slice it, a truckload of ice cream is a big problem.  I'd rather just have a free gallon.  More is not always better--sometimes it's worse.  That's negative marginal utility.

The extreme couponers on the show would likely disagree with the concept of negative marginal utility, but I think it's pretty easily proven mathematically.  Given that you already have, as one of the couponers on the show did, 150 YEARS worth of deodorant, the value of accumulating more can't be positive.  Even if it's free, it's taking time to purchase and store (and it's probably rotting in the container).

What if you give it away?  Then, it takes a huge number of  "units" to reach the point of diminishing returns, and even longer to get to negative marginal utility.  That's why couponing for charity is more attractive to me.  Also, my wife threatened me.

Well, she didn't directly threaten me, but I was under no illusions as to what she meant.  What she SAID was "You know, all your stuff is cramping my style" but what I heard was "If you don't get this stuff out of the house, I will kill you in your sleep in such a way that I still qualify to receive your life insurance benefits."  So the meaning was clear.

Back to the TLC series:  my thought when I see people who have way more than they need for the foreseeable future continue to accumulate for their own personal stockpiles is "missed opportunity".  One woman on the show got more than $600 of products for less than $10.  That's great from a savings standpoint, but if it goes from the store shelves to her basement, it's wasted.  40 jars of spaghetti sauce and 40 boxes of pasta would set a 3-person family up for a long time (an example of one of the items she bought).  Pasta and sauce go on sale pretty frequently.  It's hard to believe that those quantities are necessary to hold them over until the next sale.

So, a challenge to the TLC folks (and those like them):  give half your stockpile away.  You know as well as I do that half will still keep you set up for a long time.  Remember, the IRS counts "fair market value" as what you're allowed to deduct for a charitable contribution (I'm not an accountant.  You need to talk to one before you take this as tax advice.)  I was happy to see that at least one of the couponers did make a large purchase of cereal for the food bank, so he's on the way to meeting the challenge.

Seriously, if you've got three months' worth, there's no reason for more.  It'll be on sale again.  So give it away.  Your wife (or similarly murderously-inclined spouse) will thank you.

EDIT:  Upon reading the accounts of those who were portrayed on the show, it sounds like they all donate, some quite substantially, and that TLC chose to de-emphasize (or not emphasize at all) that aspect of their couponing.  So, in the previous post, what I've done is criticize people who are doing exactly what I do.  And some of them do it better than I do.  They are due an apology from me, and I hope (should any of them read this) that they accept it.  In addition, if any of them would prefer to respond directly, I promise to post unedited whatever they'd like to say as a response.

No comments:

Post a Comment