Why You're Overpaying at the Dollar Store

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 stationary stores.
Source: Yahoo