Many retailers make a significant portion of their profits for the year during the holiday season. This gives them a strong incentive to get you to spend as much as possible. Over the years, retailers have developed a number of tricks and traps designed to get consumers to spend more than they intend. You can spend less on holiday shopping this year by identifying and avoiding these retail traps.
Decoration Traps
Studies have shown that the longer a person looks at an item, the more likely they are to buy it. Retailers take advantage of this by placing beautiful holiday decorations near the items they want you to buy. Spend less on holiday shopping by making a list of the things you want to buy before heading out to the store and sticking to this list while shopping so you avoid buying unnecessary items impulsively.
Loss Leaders
Loss leaders are one of the most commonly used tricks of the retail trade. Loss leaders are popular items that the retailer marks down significantly to get you in the door in the hopes that you will buy other higher-margin items while you are there. You can spend less on holiday shopping by only buying the item that you came in for and leaving empty handed if the item that you wanted is no longer in stock.
Avoid Upsells
Salespeople are trained to upsell you on your purchases so you spend more than you intended to spend. These upsells may include additional equipment to go with your purchase, buying an additional item at a discount, or adding a warranty to your purchase. Unless the item the salesperson is trying to sell you is something you already intended to buy, politely decline the offer and only purchase what you originally wanted.
No-Interest Credit
Another ways retailers get you to spend more during the holiday season is by offering to extend you credit to buy more stuff with no interest charged for a number of months. People use the credit to spend more than they intend, thinking that they will be able to pay off the balance before the promotional period ends. However, if the balance is not paid off in time, the interest charges accrue from the date of the purchase, considerably raising the amount you eventually pay for the purchases. If you decide to use one of these offers to spend less on holiday shopping, limit your costs to what you can pay off in two months.
Join our newsletter
Subscribe to get the latest "Engineer Your Finances" content via email.
The last three are things that I’m familiar with, but I’d never really heard about the decoration trap, though it does make sense. Good tips to share as we are not too far away from the holiday season!