Mulching...

When someone refers to mulching their lawn, they are implying that they are plugging the discharge chute so that grass cannot escape from under the mower. Doing this allows the grass to be finely cut and left on the ground to fertilize the ground for future growth. You should only use a manufacturer approved mulch plug to perform this application.
Better quality in less time
Mulching produces nutrients that are returned to the soil. While mulching cannot replace the need for regular fertilization, it will certainly supplement a fertilization program and make your lawn healthy and green.

Another advantage that mulching offers is that it requires less time than bagging. Mulching will save you 1/3 of the time spent mowing and bagging your clippings.