Wisdom from The Action Wisdom In Action

Planning Ahead for Next Christmas

When is a good time to shop for NEXT Christmas? Right now--actually, any time between Black Friday (pick one) and April 15th.

Why? Because retail inventories need to be sold off as much as humanly possible in time to be excluded from their taxes. Inventory carried over is inventory unsold, and technically becomes property of the store, tax-wise.

Now April 15th isn’t necessarily tax time for all retail stores, but most of them have a fiscal calendar that doesn’t match up to the regular calendar, and their particular tax doomsday may be extended past January 1, depending on when they started doing business. A few have tax deadlines AFTER April 15th, but not many—mostly the ones who don’t regularly do a lot of discount selling.

Regular retailers (not wholesalers) like to have their floors cleared out of old inventory no later than April 15th, because the summer selling season merchandise usually arrives by that time, and summer being a “high” season means fewer discounts until the back-to-school season arrives, which leads us into pre-Christmas blowouts.

With our economy not performing as well as it did in years past, due to job losses, home foreclosures, gas prices, and extreme weather, you can expect year-round sales to be fewer and farther between as well.

The time to start saving for next Christmas is when you get your tax refund back—or if no refund, start a savings account (non-Christmas club, if you please). Designated Christmas club accounts will expect you to withdraw your money by a certain date to count as Christmas savings—usually by December 31. Since they pay exactly the same rate of interest as regular accounts, why not open a regular account with no withdrawal timetables built in? That way, you can use the Black Friday-to-Tax Day shopping method and get the most bang for your gift buck or gift card over 5 months and a week of prime discount shopping time.

Sure, your gifts will seem so “last year,” but you will have saved enough money not to care one way or the other. Besides, that’s what return desks are for—so the recipient can either exchange it for something “today,” or for whatever cash the item’s worth now (and it usually has left the system some time ago, so no return value can be assessed to it). As an alternative, they can re-gift the item elsewhere, or donate it to charity. It really doesn’t matter, because you will have spent so little for the item in the first place.

Try thinking ahead on holiday shopping by planning NEXT year’s gifts THIS year during the heavy-discount period. This should work all the way up until the retailers finally figure out what we’re up to, and delay discounts to later in the year, or worse—lump them all together in June. Then we really WILL have Christmas in June! Whatever they end up doing, they will always have to mark down to avoid taxes on unsold merchandise—we can wait ‘em out, can’t we? We have a plan.

Posted by Cute at 7:23 PM

Labels: economy, financial (non-tax)