I believe our supermarket does take off 7 cents for each bag of your own that you bring in.
We use big canvas reusable grocery bags, but sometimes get extra plastic bags if it's a big order. We save them up (and add the newspaper bags) and DH brings them back to the grocery store for recycling next time he goes.
We never seem to have enough paper bags for recycling our paper. We can't put paper for recycling in plastic bags - when I use the shredder for personal papers, they end up in the trash because the plastic bag that I use with the shredding machine is a no-no and they won't take it. So I often *try* to accumulate extra brown paper bags just for recycling purposes. (I LOVE Trader Joe's bags - strong paper and handles!)
sue