You think shopping is what you do when you buy things. That's true, but it's more than that. Shopping is a competition with you on one side and retailers on the other. And whenever the store gets more of your money than you planned to leave behind, they've executed a brilliant shopping trick. They win.
What follow are the tricks that retailers don't want you to know. Learn them well, and you'll turn the tables on them. You'll start winning at the shopping game!
TRICK: Buy only the loss leaders, and get out of there.
A loss leader is a product retailers sell so cheap that they're losing money on the deal. Buy one get one free is a great example. It's like bait to get you into the store because they know if they can do that, you'll buy other stuff at full price. The trick is to take just enough cash so you can buy up all of the loss leaders you will use and then get out of there.
Why stores hate this trick: Retailers hold sales to increase their cash flow — not to save you money. They do anything they can to get you through the door. Statistics tell them that once you're in the door, there is a high likelihood you will pick up enough full-priced items to more than make up for that loss leader. It's a risk on their part, and when you don't follow their plan, they lose. You win.
TRICK: Say no to the extended warranty.
This is all you need to know: The profit margin on an extended warranty is HUGE — much greater than the profit on the item itself. It is in the store's best interest to get you to fall for the warranty. Just keep saying, "No, thanks, the manufacturer's warranty will be sufficient."
Why stores hate this trick: Retailers count on the easy sell and added profit bonus extended warranties provide. Short of telling you the item is a piece of junk and sure to fail, they need to do whatever they can to scare you into buying. Just say no. You win.
TRICK: Grab the amazing deal, but pay it off ahead of time.
Sometimes stores offer zero interest and no payments on big-ticket items when you pay off the balance in full within a specific period of time. The trick is to always pay it off during the time limit.
Why stores hate this trick: Statistics say you won't pay it off on time, even if you are sure you will when you enter into the deal. They're even betting money that you won't. They've got their fingers crossed that something will happen between when you make the purchase and the payment date. Then you will have no choice but to accept their kind offer to extend the payoff time at 29.99% interest or more — which, by the way, will be retroactive to the date of purchase.
And they won't care one bit about socking you with that very big bill. You'll become part of the statistic that says most people plan to pay the balance in full before the due date but then have to change their minds and move to huge monthly payments. Beat them at their own game by paying the balance in full — even ahead of time! You win.
TRICK: Wait to buy seasonal items at clearance prices.
Retailers put seasonal stuff on sale at the close of one season or after a holiday to make room for new, full-price merchandise. They don't do this so you can buy stuff — decorations, clothes, candy, gifts — at huge discounts and then put them away until the next season or holiday. But that's exactly the way to trick them.
Why stores hate this trick: Retailers are in the business to make big profits on full-priced items. They want you to feel compelled to buy new stuff each season and each holiday. Doing otherwise foils their plan. You win. Go find those after-Christmas bargains today!
Mary invites questions, comments and tips at EverydayCheapskate.com, "Ask Mary a Question." This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of Debt-Proof Living, a personal finance member website and the author of the book Debt-Proof Living, Revell 2014. To find out more about Mary visit the Creators Syndicate webpage at www.creators.com.
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