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Why You’re Overpaying at the Dollar Store

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With frozen dinners, party balloons, shampoo and more priced at $1, the dollar store can seem like a great place for bargains. But that’s not quite true — and savvy shoppers are catching on.

Cash-strapped consumers have flocked to dollar stores — many of which defy their names by selling higher-priced items — since the recession hit, but now those stores are starting to see a slowdown, reports The Wall Street Journal. Several of the big chains said in quarterly earnings reports that they failed to meet expectations because customers are buying more low-profit items like food and cleaning supplies, and fewer high-profit ones such as clothes and home goods.

But coupon experts suspect at least part of the shift can be explained by the so-called “extreme couponing” trend that teaches shoppers to stack stores sales, coupons and other discounts to pay just pennies on the dollar for their purchases. “People are getting smarter,” says Teri Gault, founder of The Grocery Game. “Sales with coupons will almost always beat prices at dollar stores.” A shopper could get a 12-count box of Nature’s Valley granola bars for $0.79 at the grocery store with a sale and coupon, for example. On a per-bar cost, that’s 80% less than the dollar store price of $1 for a pack of four.

Beauty and healthcare products are an equally bad deal, says Stephanie Nelson, the founder of CouponMom.com. “I would never pay $1 for toothpaste,” she says. “You can get it for free at the drugstore with coupons.” Vitamins, razors and shampoo are other items easily snapped up free. There may also be quality concerns with such dollar store items, which may have been manufactured abroad or purchased from overstock lots that were stored improperly, she says.

There are still a few good dollar store deals, however. If you’re throwing a party, paper plates, tablecloths and plastic utensils are typically cheaper than at the grocery store, says Mary Hunt, the founder of DebtProofLiving.com. Small toys, balloons and candy for favors are cheap, too, while gift bags, wrapping paper and greeting cards can be half the price at drugstores and stationery stores.

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    • I tried the coupon thing I know people says it works just doesn’t work for me. guess I just don’t have the hang of it. I can be in and out of my dollar general in ten minutes. Wal.Mart is a 2hr. deal So I go to Wal-Mart every month and to Dollar General two three times a week.

    • Hello Linda,Thank you for your kind comments raigrdeng my book and the WSJ article. This is all very exciting stuff. Feel free to leave comments on the Shiny Objects Amazon page if you’re so moved. Say hi to ken.Happy Holidays,Jim

    • This morning Yahoo reprinted this story and have it as a link from the home page. In copying the story to their site, someone included a typo – “stationary” instead of “stationery” at the end.

      Just thought you might want someone to fix that, as it doesn’t look good for you, Kell.

    • Not true.. I shop there at least 2 times a week

    • It absolutely doesn’t take 90 minutes to find a coupon online. A quick google search can get you one in a minute, and there are also blogs that catalog all the available online coupons for you. Using coupons doesn’t make you extreme, nor does it take up all your time. On my last grocery trip, I bought $155 worth of merchandise for $69. I spent maybe 20 minutes of prep time, and that included actually going through the fridge and cupboards to make the list. As far as I’m concerned, that $86 saved on merchandise we’ll actually use in a reasonable amount of time was more than worth the time I put into getting my coupons ready.

About Pay Dirt

  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to quentin.fottrell@dowjones.com or tweet @SMPayDirt.

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