Wednesday, November 24, 2010

How to Tell A Sale Isn't a Sale

From the Seattle Post-Intelligencer.

"So when isn't a sale a sale? When it's chock-full of marketing tricks and false price comparisons. Here's one of our favorites:

Beware of rebates. Manufacturers love rebates. Why? Because next to nobody completes them. Return rates for various industries and items range from 2-60% which means a lot of cash left in the manufacturer's pocket--in 2005 almost half of new TiVo subscribers failed to mail in their $100 rebate, leaving $5,000,000 unclaimed. Look for deals with instant at-register rebates or skip rebates all together--the rate of return is simply too low to trust yourself to get around to it before the deadline comes up."

"The most interesting part of the rebate non-sale is that responsibility sits right on our own shoulders. They're willing to give us money. They're offering to give us money. But we, in the midst of our third batch of IKEA eggs--we have years to make up for, after all--are simply to lazy to claim that money. Shame on us."

More from the Life Hacker site:

"Discounts based on inflated prices. Let's say the Manufacturer's Suggest Retail Price (MSRP) is $200 for the Super Tamagotchi Fun-Fun Time Battle Arena but everyone is actually selling it for $150. A retailer advertising it as 25% off for $150 is playing the technicality game with you. It's technically 25% off the MSRP but it's 100% the price everyone is selling it for. Be wary of original prices that are artificially padded to make the buyers feel good about saving.

Check the tags.If the tag came from the manufacturer with a sale price already printed on it—like "Originally $99.99 Now $79.99" it was never a deal. The pre-printed sale trick is designed to prey on gullible shoppers who want to feel like they're saving a buck—even when they're not. Real sale stickers are slapped over the price tag or hand written with the original price crossed out. (The top article in this image shows a real price with an updated sticker attached, although in that case the store clerk's error is particular humorous.)

Avoid liquidation sales. Liquidation sales are rife with ripoffs. Liquidation sales and other massive closeout-type sales relay on the idea people have that the prices within must be rock bottom. Sure some people score great deals at a liquidation sale but liquidators play dirty and will often jack up the prices during the start of the liquidation to maximize their profits. In the case of the massive Circuit City liquidation last year items were returned to the MSRP or even above—early shoppers not only didn't get a deal, they got completely ripped off.

Beware the shipping trap. Although most retailers, especially online retailers, have gotten savvy to how much consumers love free shipping—and either outright offer it or have copious coupons for it—you can still get hosed on shipping and handling. Be conscious of how much shipping costs and be wary of coupons canceling each other out—I placed an order the other day with a free shipping coupon only realize moments before I submitted it that the 10% off coupon I had ignored when I had one item was now more valuable with three.

Make a to-buy list. The easiest way to get suckered into a deal that isn't a deal is to get locked into the "But it's a good deal!" hypno-ray marketers wield. The easiest way to avoid getting sucked in is to make a list, well before you go shopping, of what you actually want. Need a new microwave? Put it on the list. Want to upgrade your old SDTV to a whiz-bang flat panel? Put it on the list.

Research your list. Just knowing that you want to buy a new HDTV doesn't help you if you have no idea what is going on in the market for your new purchase. Scale your research according to the price of the item. Looking to save on some sneakers? Compare prices on your lunch break one day and possibly buy them right then. Looking to buy a 65" HDTV? Research the feature, the going rates, and the best time to buy it.

Visit price comparison web sites. We'll be talking about price comparison apps for your phone in a moment. What mobile apps make up for with portability they lack in comfort and relaxation. Nothing beats sitting in your office chair, away from the craziness of holiday stores, carefully comparing prices (and possibly even ordering it for cheaper, with free shipping).

Google Shopping is a great starting point; thanks to a recent update it even shows local stock. You'll see thousands of entries across markets like Amazon, eBay, and smaller online merchants, getting an immediate feel for the going rate in the process. More focused comparison tools like previously reviewed BeatMyPrice, SwoopThat, and Gazaro.

Load up on mobile price comparison tools.You spent a couple hundred on a sweet smartphone, it's time to put that baby to work and get some cash back. Even a decade ago it was extremely difficult to effectively compare prices. Most people simply compared the price at the local Sears to the price at the local Best Buy and went for the best option. Now thanks to price comparison web sites, mobile applications with features like location awareness and bar code scanning, and snappy internet access on smart phones, it's possible to compare even if you haven't done your research."


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