Wednesday, November 10, 2010

Are You Really Getting A Good Deal?

I received this e-mail yesterday.  It's a good reminder of what the stores are using to get you to spend more, especially now that we are in the Holiday Season.  While there are a lot of really great deals out there there are also a lot of inflated prices "on sale" for the items normal price.  And who doesn't get sucked in with those impulse buys.  Take a moment and read this e-mail.  It's a good refresher. 

These days everything seems to be on sale 24/7 and the once-rare “half-off” discounts have become the new regular prices for savvy shoppers. But are you really getting the best price or value for your money?  Now it’s going to take more research on your part to find the best deals.

You have to know that no matter how good the discounts seem, the retailers employ marketing strategies that will entice you to buy while they still make a profit.  When they advertise half off a $150 pair of boots, it sounds much better than another store selling $75 boots at the regular price, even though they are exactly the same. Markdowns of 50% on toys and electronics have already begun, and big discounts on household goods and small appliances are close behind.

Each store is hoping their ads will convince you that you’re getting the best deal with them. How do stores still manage to make profit while offering such big discounts? Here are a few clues:

  1. If the items are truly marked down below cost, there are a limited number of them offered as a “loss leader” just to lure shoppers into buying other items at the same time.
  2. Rotating discounts offer a “here today, gone tomorrow” strategy that pressures the consumer to buy now, even something they don’t need, because it’s “such a good deal.” They also generate more visits from customers who realize there is a pattern of constantly changing sales promotions.  The best way to monitor these offers is by signing up for the email list of your favorite stores.  For example, the bookstores seem to offer 33% off the regular price weekly and 40-50% off monthly.
  3. The markdowns are taken from inflated prices that make the discounts seem more substantial. They’re using a strategy called “anchoring” by creating an artificial reference point, quoting a high retail price that few people ever pay.
  4. Some stores constantly offer store coupons or discount their merchandise every day, so they are factoring in these discounts in their pricing structure.  The retail prices in these stores are meaningless and the deals are not really good values.
  5. The biggest sales are only offered for a limited time to create a shopping frenzy. The concept of “Black Friday” and “doorbuster” deals for a few hours will simply get shoppers to the store by any means.  And this year we are suddenly seeing “Black Friday creep” well before the traditional Friday after Thanksgiving – now every Friday is “Black Friday” and some stores even began advertising such promotions as early as July!
  6. The zero financing offers on big ticket items are a good value only if consumers pay off the balance before the end of the term offered.  Otherwise, you end up paying an inflated interest rate charged from the date of sale.
  7. Free shipping is another gimmick to attract shoppers.  They are enticed to pay more for an item because it has free shipping, or they are forced to add other items or fillers to achieve the sales level required to get free shipping.
  8. Extended warranties and other “up-sells” trick the shopper into paying for services that often cost as much as the item.  Consumers fail to get their money’s worth because they rarely ever take advantage of warranty service, and the stores can make as much as 80% profit! (read about other “shopping gotchas” here)

You just can’t shop on impulse these days, or you’ll surely pay too much. It doesn’t matter what the discount offer says, what really matters are your out-of-pocket costs, if you can combine sales and coupons wisely, and whether you’re getting enough value for your money. Savvy shoppers know it’s inevitable that there will always be another sale. Once retailers begin to run non-stop sales, observing the pattern of their rotating offers and researching the true street prices will help you catch the items you want at the very best prices.

Here at Buxr we are trying to do some of the legwork for you. The deals submitted by our community members always have the price and shipping charges clearly marked and in many cases you can see price comparison with similar offers and even historic prices showing how the product price changed over time. Take a note of these details when you come to Buxr for your holiday shopping this year. These days, only uninformed consumers are paying full price.

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