ADVENTURES IN THE COUPON TRADE\Shoppers save big bucks by swapping, redeeming cash substitute.

Byline: David J. Morrow The New York Times

David Kaiser is a cognitive research psychologist who lives in the affluent Brentwood section of Los Angeles. He and his wife make a total of $70,000 a year and frequently spend long weekends in Santa Barbara.

So what was he doing on a recent Sunday evening? Making a run through Ralphs supermarket with a bulging envelope of grocery coupons in hand. Darting toward the pet food section, he passed over the Purina brands on sale and nabbed six bags of Whisker Lickins to match six coupons, each saving him up to 40 cents off the $1.19 price.

In an hour, he scored similar coups in every aisle. For his effort, he cut his grocery bill by more than 40 percent, to $48.

"Coupons are as good as cash," said Kaiser, savoring the $34 in savings on that one trip. "I've saved around $6,000 over the past seven years. My wife and I use that money to take vacations or buy extras for the house. It really adds up fast."

Nearly 115 million Americans clip coupons and redeem them at some point during the year. Of that group, Kaiser is part of the hard-core group called couponers, bargain hunters who seldom buy anything at the grocery store unless it is discounted and who plan their shopping around days when stores double their coupons.

This group accounts for most of the coupons redeemed each year, and the practice has spawned something of a secondary market on the Internet and among military personnel.

Often thought of as the weekday pastime of suburban housewives, couponing is not just for tightwads and people living on limited budgets. The average annual income of couponers nationwide was up 10.5 percent last year, to $41,000, according to NCH Promotional Services, a coupon-processing company in Lincolnshire, Ill.

Some of these people are professionals who, burdened with retirements to finance and children to educate, use coupons to sandbag their budgets. But most say couponing is really a sport, a piece of turf to conquer.

Never has this personal challenge been greater. During the last several years, virtually every major consumer products company, including giants like General Mills and Philip Morris, have steadily sliced the number of discount coupons offered on their brands.

Last year the number of coupons in circulation slipped 6 percent, to 292 billion, according to NCH. Even then, fewer than 2 percent of coupons were redeemed, reflecting the attitude among many consumers that the chore of clipping and redeeming coupons is not worth the effort.

Die-hard couponers have other worries, too. While the average face value of coupons increased 8 percent last year, to 68 cents, the length of time before expiration shrank to an all-time low of 3.3 months.

"Consumer goods companies have long known that making a national coupon drop isn't the most efficient way to market their products," said Jane Perrin, executive vice president of NCH. "Shortening the length of time when a coupon can be redeemed is one way to increase their impact."

More trouble may be on the way. Procter & Gamble, which recently cut its spending on coupons in half, began a test last month in upstate New York that bans coupons on all its products.

In exchange, the company slashed its prices on everything except coffee. The practice of replacing coupons with everyday low prices has spread nationwide, Procter & Gamble said.

While no one predicts the total demise of coupons, their decline is likely to continue. To reach 55 million Americans with coupons, a company spends $1 million, roughly twice the amount needed for a 30-second television commercial, on a top-rated program.

The trick for marketers will be to get coupons into certain shoppers' hands. "You'll see these consumer products companies doing more target marketing," said Burt Flickinger, director of Management Horizons, a consulting arm of Price Waterhouse.

Couponers, meanwhile, are not taking this drubbing lightly. Riled by the recent coupon cutbacks, many are working on strategies to stretch the value of their discounts, while others are tracking their coupon inventory on software more often used by managers at small companies.

Some of these plans would put Jack Benny to shame. Fabre Sanders manages a doctor's office in Boston. To broker her collection of 1,000 coupons, Sanders goes on-line to Coupon Net (http://www.couponnet.com) to trade with other people nationwide.

Anyone trying this trick needs to learn the language. Couponers have an argot that is so complex it would confuse professional rappers. A sampling: "B1G1F,B2G1F" is a buy-one-get-one-free, buy-two-get-one-free offer. "C notes" aren't $100 bills, but proof-of-purchase labels from packs of Camel cigarettes. People looking for an "Hgt" don't want a hit from a drug, but a hanging tag from a product in the grocery store.

From her on-line network, Sanders has a specific bounty in mind: coupons from the West Coast. "Out there, few of the grocery stores double or triple coupons," said Sanders, 24. "Nearly all of them do here. To make up for the difference, companies will issue coupons worth 75 cents or more. You'd never see that here. They're like gold if you can get them."

Mining these gems was a cinch. Within weeks of her request, Sanders recruited several couponers, who sent her envelopes full of 75-cents-off coupons in exchange for ones she didn't want. The process is simple. Coupon traders compare "wish lists" - coupons they have and those they need - by electronic mail and then drop the order in the mail the next morning.

"I'll get a 75-cent coupon on Cap'n Crunch cereal from someone in California and take it to my store, which doubles coupons, and get $1.50 off," Ms. Sanders said. "I've been able to increase my savings by 25 percent through the Internet. I should save $2,000 this year and perhaps more."

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Photo David Kaiser of Brentwood cuts his grocery bill 40 percent by using coupons. He says he's saved $6,000 over the past seven years. The New York Times