Understanding Overage

6/4/2013

JILL CATALDO

Coupon shoppers love overage. Overage occurs when the dollar value printed on a coupon exceeds the selling price of an item. If I buy a box of pasta that’s on sale for 79 cents, but I have a $1 coupon, I've got 21 cents in overage. What happens to that 21 cents?

Depending on how your store handles overage, one of three things may happen. You may get that 21 cents back as cash, the 21 cents may be applied to your end balance at the register or the store may keep the overage, adjusting the coupon’s value down to match the sale price of the item.

Now, you may be thinking that 21 cents isn’t a big deal. But overage can equal both big business and big savings. It isn’t always pocket change. Recently I had a coupon for $4 off any cosmetic product from a major manufacturer. Cosmetic remover was just $1.14 (and yes, cosmetic remover is a cosmetic product!) Now, I had $2.86 in overage. What happened to it? Well, my store’s coupon policy allows shoppers to receive their coupon overage back in cash, and I essentially was paid $2.86 to take the cosmetic remover home. That’s a deal! And, because I had four coupons, I bought four removers and was “paid” $11.44 to buy these products – my favorite kind of shopping.

Several of my readers have asked questions about overage recently, so let’s further delve into overage and how it can be handled in different situations:

Dear Jill,

Sometimes I have a coupon for an amount that exceeds the item’s sale price, usually when the item is a store markdown. I have encountered three different responses. If I purchase the item alone, the store either accepts the coupon but usually doesn’t give cash back. If I buy other additional itemsin order to get a total that exceeds the coupon value, I get the full coupon discount. How does the manufacturer reimburse the store for these different situations?

Ed G.

It sounds like Ed’s store allows coupon overage but does not allow cash back in an overage situation. The register allows the overage to be applied to other items he’s buying in the same transaction. The store is reimbursed the full, face value of the coupon. So, to use my $4 cosmetics coupon as an example again, the store will be reimbursed $4, plus a handling fee. No matter what price the cosmetic product sells for, the store gets the $4. Knowing this, if the store allows you to buy other items and “eat up” that overage, applying it to your own groceries, it’s absolutely a smart thing to do.

Here’s another reader email regarding overage:

Dear Jill,

Sometimes I have a Buy One Get One Free coupon and it states it is valid up to $1.50, but when the item’s price comes up, if it’s less than $1.50 they enter the amount that the item scanned at – for example, $1. I thought if the coupon states $1.50 and the item value is less that they are supposed to credit you that amount on your bill at the end.

Zandra V.”

BOGO and free-product coupons do typically contain an “up to” price. They’re intended to make a product free at whatever price it’s selling for – within reason. The “up to” price is the maximum dollar amount that the manufacturer will reimburse. But, these coupons are different than standard dollars-off coupons. The store will only be reimbursed for the actual selling price of the item, so the store is only allowed to take off the actual selling price of the item and no more. You do not receive overage with these coupons.

Smart Living Tip: To find out how your store handles coupon overage, check the store’s coupon policy. Many national supermarket and drugstore chains have their coupon policies available online, and the policies clarify whether or not your coupon will be adjusted down or whether you’ll receive the overage.