yea i do that too, thats where I get the wrapping paper for all the "other" people I get gifts for. The immediate family and loved ones get nice wrapping paper.
As others have said, I only use 99 cent stores during Christmas for cheap wrapping paper, tape, bows, bags, etc. I rarely ever go in there any other time. Now stores like Dollar General, Family Dollar, etc. are not really 99 cent stores like Deals and Dollar Time. These stores are generally on par with Wal-Mart in price, usually a few cents more, but I will go there first because Wal-Mart is a hassle.
I bought some earrings at Family Dollar for $1. They were supposed to be part of a "costume", but everyone loved them. Of course, they may poison my ears someday... Other good uses of dollar or near-dollar stores: cleaning supplies (as others have said), votive candles, body wash, umbrellas, pillows, cheap sunglasses. Not sure if I trust all the food; I'll go ahead and drink the sodas.
I live a block from a Jack's 99c in NYC and its where I get most of the staple groceries. Cheese, milk, eggs and snacks I get there. 5 bagels and cream cheese is $2. Cat litter is also a steal there, but it doesn't taste as good as the fancy type of cat litter. Halogen lightbulbs (in a two Pack) are there, locks etc. For the chicks here, thank you cards and such are there, cheaper than hallmark. Ketchup I've gotten before, and gum is a frequent buy. Pasta and tomato sauce too. All the supermarkets in NYC are expensive, so this is the place to go for me unless I want meat, fruit or vegetables. Never get toilet paper, tissue paper, 12 packs of condoms, batteries or cologne at a dollar store.
I don't even use cat litter anymore. I use starter chicken feed mixed with a little bit of Arm N Hammer Cat litter Deodorizer. As long as you are gentle while scooping, it's perfect and last twice as long.
