According to the National Retail Federation, consumers are expected to spend about $700 this holiday season, on average, but we could easily spend more -- especially if we fall for holiday "gotchas" like these:
Retailers know what they're up against: a very cautious consumer who is only going to spend if the price is right. In other words: SALE ITEMS ONLY. That means you can expect sneaky sales (one-day sales that inadvertently turn into a week, for example), shady pricing tactics -- "Buy two get one free!" - and, says Consumer Reports, a bombardment of "Doorbuster Sales" that may not offer ridiculously low prices. Retailers are creating a sense of urgency -- and often at your expense.
Your best defense: Make sure the deals really are deals -- comparison shop on sites like pricegrabber.com and bizrate.com before you buy anything.
Phony liquidation sales
You've likely seen the signs -- "Everything Must Go!" "Closing Our Doors Forever!" -- and while you can find some decent sales at these places, that's not always the case. When I shopped at Circuit City's liquidation sale last year for an investigation for The Early Show on CBS, I found several items -- including flat screen televisions and GPS systems -- available at Amazon.com for significantly less. Furthermore, sometimes liquidators -- whose objective is to earn as much money as possible to pay the creditors, by the way -- bring in outside goods or additional inventory to supplement what's in stock. These are items that never had a "regular" price so you're getting 50%-60% off a price they never charged! While this is deceptive -- and even illegal in some states -- it doesn't stop many from doing it.
Your best defense: Check the price tags. If they're a different color, typeface or format, chances are it's excess inventory that's been brought in by a third party. You'll see this most predominantly at electronics, jewelry and carpet stores.
Store charge cards
Yes, they're pitched heavily at this time of year ("Save 20% if you sign up today!"), and yes, they're easy to get -- much easier than credit cards, for example -- but resist the offers under these circumstances: if you're in the market for a loan (opening several accounts at once could reduce your credit score by up to 30 points, says credit card expert, Bill Hardekopf, CEO of lowcards.com). Also avoid store charge cards if you carry a balance -- as 50% of consumers do (on average: $8,000) -- as interest rates typically exceed 20% (versus about 14% for regular cards).
Your best defense: The only foolproof way to avoid overspending is to pay with cash.
From shipping and handling fees to restocking fees to gift card fees (Bank-issued cards still charge a fee to purchase them!), it adds up. Avoid restocking fees (of 10-20%!) by NOT OPENING THE ITEM IN QUESTION; instead of giving gift cards this year, why not give cash? A new poll by Consumer Reports shows that 58% of shoppers plan to do just that, up from 44% last year.
Your best defense: See if your favorite retailers are participating on Free Shipping Day on December 17.
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