For some reason, this year I’ve been bombarded more than any other year by advertisements for Black Friday deals. The marketing is coming from helpful people who just want to share the good news with their friends, people who are clearly paid to spread the messages, and retailers who simply want people to buy as much as possible so they can show a profit on their financial books this year.
Many of the “Black Friday deals” you hear about are not good bargains, they’re just marketed in a way to make people believe they are. Furthermore, even if an advertisement is a good deal for someone, it may not be a bargain for you. Here’s how to see past the dirty marketing tricks and determine where and how it’s worthwhile to spend your money this holiday season.
Be skeptical of every advertisement, even if it’s coming from a trusted source.
Dirty trick: companies use your friends and other trusted entities to convince you a deal is worthwhile.
When retailers or manufacturers pay the public to advertise for them, it changes the natural order of communication. If I were to ask you to share a deal I’m offering, let’s say it’s a notebook computer for $400, you might not think it’s such a great deal, and you’d be unlikely to share it. But if I offered the deal and said I’d pay you $25 for every sale you refer to me, you’d be more likely to share the deal. And why not? A few sales and you’d be able to buy the notebook computer for yourself.
Many people sharing their favorite deals have the promise of their own income as a motivating factor for sharing the deals. I’m no stranger to this; sales, while a small part of my business, contributed strongly to the value of that business, which eventually allowed me to sell that business and remove myself almost completely from the sales process. Eventually, those who share bad deals as if they’re good will eventually stop because they will, over time, not be seen as a trusted source. But there will always be others.
Being skeptical and always asking questions is the basis of one money system that will lead you to success in building wealth.
Price history and future.
Dirty trick: Advertisements make you think a price is good when it’s not.
One question you want to ask is whether the deal is a good price, not just based on history but on the future as well. Advertisements can make a price seem good when it is not by evoking an emotional response rather than providing the information you need to make a good decision.
On the whole, Black Friday ads published by reputable retailers do a good job of offering the lowest price for many items thus far, but what may be difficult to predict are price movements between Black Friday and the holidays. (This yeah, Hanukkah falls very close to, and even on, Thanksgiving, but that isn’t the case most years.) In many cases, Black Friday deals don’t look as good in hindsight, because depending on the items, prices continue to fall as retailers want to eliminate their inventory before the new year.
According to Consumer Reports, prices almost always fall after Black Friday and Cyber Monday. The frenzy and hype surrounding these shopping events often cloud what is really happening with prices. The Wall Street Journal agrees.
Plan your shopping and stick to the plan.
Dirty trick: Advertisements encourage impulse decisions, and consumers spend more.
Most holiday shopping mistakes occur because it’s easy to make impulsive purchasing decisions. When a sale lasts just one day like Black Friday — or when a desired item is likely to run out of stock within hours of a store’s opening — the emotional frenzy takes over and rational decision-making loses. Maybe you can get a toaster oven for $15, but if you weren’t planning to give anyone a toaster oven and you have your own, you’re not saving $40, you’re spending $15. That’s not saving; that’s spending.
“Buy now while supplies last” is one message that successfully encourages shoppers to spend more than they otherwise would, in this case, with a sense of false urgency. And even if supplies don’t last (they might not with “doorbusters”) there will always be a roughly equivalent alternative.
Bargain culture has taken over the concept of holiday shopping. People look for deals just to be proud of their shopping savvy. But if it’s not on your list, it’s not a deal for you.
Deals help retailers clear inventory of discontinued items.
Dirty trick: Heavily discounted items are often worth less than nothing to the retailers.
Many of the Black Friday deals you’ll experience are able to be priced as they are because they are discontinued or old items. Technology moves quickly. One of Best Buy’s biggest deals in its Black Friday advertisement is for $100 off an iPad 2. This sounds like a great deal, and for someone, perhaps a kid, it might make a good gift. But the problem is that this version of the iPad is considered old technology. It won’t even run some of the more modern iPad applications. A year from now, the iPad 2 will seem positively ancient.
This particular iPad (the 16GB variety) isn’t technically discontinued, but its cousins are, and there have been three generations of iPads since the iPad 2 was introduced. In terms of technological advancement, it’s already ancient.
Many other technology products follow similar cycles. Many deeply discounted items in Black Friday ads have been out of date for a year or two. If buying a product that will continue to receive support from the manufacturer and will remain competitive in the marketplace for a good amount of time is important to you, there are two things that can happen. If you buy the deeply discounted item, you’ll be unhappy with the purchase earlier. Or, if you like the deal but want a more current version of the product, you will end up spending more money for the more up-to-date item.
How to shop for the holidays intelligently.
I’m tempted to completely ignore the holiday marketing season. For me, and for many other people, it’s a waste of time. Buy what you need or strongly want, maintain some discipline, and be done with it. As studies show, Black Friday isn’t the best time to buy most things in terms of price.
But there are some good resources that are worthwhile if you do have a fairly typical household where paying attention to actual, not purely marketing, bargains might help. The drawback of putting time into this endeavor is that it’s very easy to get sucked into the shopping frenzy and spend more money than you need to. The holiday season is terrible for long-term wealth building.
But if you must, there are a few essential resources.
- Keep your eye on bfads.net, where you can find deals on just about everything that exists for the holiday season. This is just everything, so there’s no good indication of what might be a legitimate bargain and what won’t be. You need to use a critical eye.
- Consumer Reports is simply the best in terms of editorial when it comes to holiday shopping. They are not as easily influenced by the retail industry, and the writers are willing to speak the truth. The magazine’s ratings are absolutely invaluable when it comes to making larger purchases, inside or outside the holiday season.
- It’s best to remain skeptical when reading even the best blogs and websites with holiday deals, but you may want to start with SavingsLifestyle, FatWallet, and CNET.
What are your plans for holiday shopping this year?