Buying coupons for deep discounts carries risk

Never pay retail.

The marriage of the Internet and advertising has created a hot new trend — coupons that you buy to get deep discounts on everything from clothing to kayaking.

That’s got some experts saying that consumers should think twice and shop around before ever agreeing to pay retail prices again. But remember there are some risks to buying coupons too, including the classic tendency to overspend because you can’t pass up a bargain.

“Coupons are much more attractive and enticing than they’ve ever been, so we are seeing them become more of a problem,� said Linda Davis-Demas, a counselor at the Consumer Credit Counseling Service of Greater Dallas. “I would strongly discourage people from buying things just because they have a coupon for it.�

That said, if you’re already planning to go out to dinner, join a gym or learn salsa dancing, there’s a good chance that you could pay a fraction of the retail price by seeking out online coupon sites that will sell you a deal for 40% to 60% off retail prices.

“It used to be that you might be able to search around and find out about a happy hour here or there, or some discounted deal,� said Jim Moran, co-founder of Yipit, a New York aggregator of purchased coupon deals. “Now it’s everything.�

Feeling flabby? A coupon site called Groupon was selling Los Angeles fitness classes for 67% off last week. (Coincidentally, they also had a half-price deal on cookies the previous week.) Want to take in a Dodgers game? One recent day the site was offering premium seats for 53% off.

Another site called Living Social was offering discounts on kayaking in Malibu and indoor rock-climbing lessons in Riverside, not to mention a variety of coupons that would allow you to eat elegant meals for 50% less than the price on the menu.

Annie Korzen, an actress who used to appear regularly on “Seinfeld,� says her favorite coupon sites provide deals on dining out. Korzen, who recently penned “Bargain Junkie: Living the Good Life on the Cheap,� is particularly fond of Restaurants.com, which will allow you to buy $25 gift certificates at popular eateries for just $10. Sometimes those certificates get discounted further and can be picked up for as little as $2, she added.

The coupons aren’t just for meals at sketchy diners, Korzen stresses. Whereas Groupon will sometimes offer half-price coupons for fast-food establishments, Restaurants.com was recently advertising cut-rate deals at such famous eateries as Morton’s Steak House and Roy’s, a Hawaiian seafood restaurant.

“I’m a bargainista, but I’m also a snob,� Korzen said. “I like good, well-prepared food.�

Deals on spa treatments are so ubiquitous that Moran says you’d have to be crazy to pay retail.

“It would be financially irresponsible for you to make an appointment for a massage,� he contends. “Deals on massages pop up every two or three days.�

Discounted gym memberships are also so common that Moran recently wrote a blog post about how you could get a full year of widely varied workouts at a fraction of the cost of joining a gym by buying the right coupons.

A site called BuyWithMe.com recently underscored the point by offering a two-month gym membership, with a free personal training session, for $45 last week.

What’s the catch? Unlike traditional coupon sites, such as RetailMeNot that share “coupon codes� for free, most of these deeply discounted coupon sites require you to pay upfront for goods that you’ll consume later. If you don’t end up using that gym membership before the expiration date, you’ve thrown $45 out the window.

Most of these pay-in-advance deals are also offered only in major cities such as Los Angeles, New York and San Francisco. You’ll be hard-pressed to find many coupons for retailers and restaurants in Modesto.

In addition, all the coupon offers have restrictions and expiration dates. Some restaurants, for example, will only let you use the coupons at lunchtime or on low-traffic days.

Many demand a set amount of spending — you need to buy $35 worth of food to use a $25 coupon purchased from Restaurants.com, for example — and tax and tip aren’t included, nor is takeout.

These restrictions are spelled out in the terms and conditions, but you need to read those terms before you buy.

The biggest risk, credit counselor Davis-Demas said, is that you can get so caught up in getting bargains that you spend more than you can afford on things you don’t need.

“We see people who just can’t resist the thrill of the save,� she said. “If they have a coupon for something, they’ll buy it. They don’t even think about whether it’s something they need.�

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