Tuesday, June 26, 2012

Sneak Tricks That Stores Use To Sucker You

Being a caregiver means that your budget has to stretch even further than it used to. Not only is your time limited, but your income is probably reduced and you have absorbed extra health care costs. Saving money now become even more critical. So we scour the internet looking for ways to help.

5 Shopping Tricks to Save You More at the Store

by Mary Hunt, founder of Debt-Proof Living

Retailers work hard to get our money. They offer “special promotions” and put other tactics into play, even hiring human behavior specialists to figure out our shopping habits and how to get us to spend more. But by having a few tricks of your own, you can foil those plans and save big.

Trick to Use: Buy only the “loss leaders,” then leave. A loss leader is something retailers sell so cheaply, they’re willing to lose money on the deal. The first clue to finding one: astonishingly low prices. And if the item is limited, i.e. “Limit 2,” that’s a dead giveaway that it’s a loss leader. It’s also not unusual for supermarkets to tie loss leaders to a holiday, Memorial Day by offering something like, “Buy the Hot Dogs and Get the Buns Free!” My personal benchmark is if it’s at least 50% of the regular price, that’s a loss leader. Stores use these as a way to get you there, knowing you’ll stay a while and buy other items at full price. Studies show that half of all supermarket purchases are unplanned. But when you arrive having scoured the circulars and savings blogs and are armed with a list to buy just loss leaders, you upset their plans and they lose. You win.
Trick to Use: Pay with cash. Even though retailers don’t have to pay fees when you pay with cash, they hate it. They know that if you pay with a stand-in, like a credit or debit card, you will spend more and boost their bottom line. In fact, researchers at the Massachusetts Institute of Technology found that consumers will spend up to 100% more on an item when using plastic. So unless you are paying by mail or online, always use cash. You win.

Trick to Use: Say no to the extended warranty. This is all you need to know: The profit margin on an extended warranty is huge—much greater than the profit on the item itself. Meaning, stores make their money on the warranty more than the sale of the item. Just keep saying: “No thanks.” Most appliances and electronics come with a manufacturer’s limited warranty for the first 90 days, which is generally sufficient. If you’re worried about the product breaking, say “no” to the store warranty, but put that same amount money you would have spent on it, into a special account. If the item fails, use that money to pay for the repair. If it doesn’t, a nice nest egg awaits. And keep in mind that some credit cards extend your warranty for free. For example, anything purchased with an American Express card automatically receives an additional year extension beyond the manufacturer’s warranty; Visa Signature Cards also give one additional year. Call your card company to learn if you have this benefit already. You win.

Trick To Use: Grab the amazing deal, but pay it off ahead of time. Stores often offer zero-interest when you pay over a period of time, or they will defer payment for a period of time. The reason they do this? Statistics say that you won’t pay it off on time, even though you are sure you will when you enter into the deal, and that you will end up paying a high interest rate, which will be retroactive to the date of purchase—meaning, the interest will be waived if paid in full within, say, 12 months of purchase. But if you do not pay in full, you will automatically owe something like 29.99% interest starting back at the date of purchase. On a big ticket item like a television or furniture, that could add hundreds of dollars to your balance. Instead, always pay off the item within the given time frame. Automate your payments using your bank’s online auto bill-pay feature and you won’t have to rely on your memory to make those payments on time. If the term is for 12 months, give yourself some breathing room by creating your payback schedule for say 10 months. You win.

Trick To Use: Wait to buy seasonal items at clearance prices. Retailers are in the business to make big profits on full-priced items, and they know you can’t resist new items to decorate your home or outfit your family. They want you to feel compelled to buy new stuff each season and each holiday. Doing otherwise messes with their plans.So instead of buying, stop yourself from running to the store right away, and wait until seasonal stuff goes on sale. You win.

* I hope you found this article useful…if you ever want to know which websites I search to bring you cool articles, ideas, and statistics don’t hesitate to ask. –yours, Donahueg

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