Money Budgetting : Spending

How to buy quality products for discount prices. Stores try to answer this quandary with door-busting deals on reduced merchandise. Maybe it's the eggnog, or all that good cheer, but in December we're prone to fall for deals that just don't add up.

'Tis the season for retail trickery. The stores have less than a month to make their last-quarter profit margin. They are willing to sacrifice your naivete for the bottom line. Stores will entice you with coupons, pay-later schemes, and even guaranteed money-back returns.

Step 1.
Cut time in half by not cutting coupons. The holiday season is not the time to begin couponing. There is a unique strategy that bargain hunters use when saving with coupons. In December, manufactures beef up Sunday inserts with coupons. Consumer Reports suggests we're more likely to buy an item if a coupon is available, even if it isn't our preferred product. Translation: we're likely to spend more money on an item we don't want, just to save a bit. Avoid coupons for items you don't usually buy, and you'll save more.

Step 2
Avoid the false sales price. Retail workers know the science. If they're preparing for one of those 20-50-percent-off weekends, they spend the week before adjusting item tags. They add an adjusted price atop the retail price, then give an additional percentage off. Do you recall ever seeing the original price? The discounted price is kindly plastered atop it. The original retail price is hiked up a few dollars. So when we purchase the discounted item with that percentage off, we're actually paying the original price.

Frank Woolworth, a pioneer of retail, invented this technique decades ago. Modern retailers continue in his legacy.

Step 3
Beware of stores that always have sales. Check your Sunday newspaper and it will have a coupon from Kohl's or Burlington Coat Factory. They have a continual sales cycle to lure us in the door. Don't rush to this weekend's clearance sale, only to find next week's 50-percent-off sale. These are time-tested marketing strategies that speak to the inner bargain hunter. They know we crave savings and continue to repackage it to us in unique ways. They're offering us an opportunity not to pay the price mark-up. Just accept it. The sales price is actually the original retail price.

Step 4
Check the shipping price. Amazon, the company that introduced most of us to online shopping, offers its customers free shipping after $25. You purchase the bestseller for $10 and the checkout threatens you with a free shipping after $25.

Look, your shipping fee will probably be $3 to $5. Don't search to buy another item to arrive at the $25 price mark. You'll inevitably surpass it and end up spending up $15-$20 more in an effort to get the deal. Check the price of shipping before falling into this con.

Step 5
Don't pay for an extended warranty. If your purchase is a kitchen appliance or electronic item, beware. Most electronics and appliances come with a one-year warranty. The check-out clerk will try to entice with an extended warranty. The truth is, unless it's a car, a one-year warranty is more than enough coverage.

Become a loyal customer to a particular brand like HP, Dell or Kenmore, and sign up for free membership. That membership will come in handy. If a product fails after the warranty expires, go on the message boards and complain. You're sure to get a swift response.

Step 6
Pay now, not later. Every electronics and kitchen appliance store will have a 0% down on a big-ticket item. You won't have to begin paying on that big screen television until March or July. If you're itching to pull out the credit card, or worse, sign up for a new card, don't do it. Check the fine print. When it's time to pay for the item, the interest rate will be in the double digits. You'll end up paying as much as 30% interest for the time the company 'loaned' that big screen television to you.

Step 7
Return unopened items. Some of us still fall for this trick. We're a bit iffy about a product, but buy it knowing we have 30 to 90 days to return in case we don't like it. Check that policy again. Many stores include a hidden "re-stocking fee" in that return price. They'll take your opened product, and also take a third of the money-back price. If you want your full return, bring back the product unopened.

Step 8
List and stack. There are two tools to combat retailers schemes to empty your pockets: create a shopping list and stack deals. Write a list of gift recipients, products and stores. Then, check each store for deals. Finally, stack a deal with a coupon. The only way to save is to use a coupon on a marked-down item.

Step 9
Compare and haggle. Walk with sales ad in hand. For instance, if you're walking into Office Max, have a Staples ad in hand. It makes the sales clerks a little nervous. They know you're price checking.

If the product is priced cheaper at the competitor's store, in this instance, Staples, ask the check out clerk if they will honor the price. Many stores have an unspoken policy of paying the competitor's price. Some will even take the other store's coupon!

Try your luck. I've used this technique at different outlets, drug stores, office supply, and electronic. I have never been turned away. It always works.

Step 10
Outsmart the stores. The Consumer Board reported 9 out of 10 shoppers in 2008 didn't regret taking time researching their holiday deals. All this takes a bit more research than the average weekend spree, but your bank account will thank you.