5 retail ‘deals’ to avoid this holiday shopping season


We’ve all been there, standing face to face with the oh-so-friendly sales associate desperately pitching the brand’s latest deal for “buy one, get one free” or “spend this, get these reward points” that will, according to the salesperson, “save you tons of money in the long run!”

Yeah, right.

We hate to say it, but the vast majority of store deals, especially those involving a store credit card, are designed to make the store more money at your expense.

To avoid this costly result, consider the following gimmicks often used by retailers to lure in less-than-savvy buyers and prey on human psychology:

#5 – Layaway

Layaway can be a great alternative to using credit in some instances, but it should not be thought of as a free option, since there is always a catch. In most layaway plans, shoppers select the items they need for an upcoming holiday or event, fill out a layaway contract, and make regular payments over time until the price of the items is covered. However, there is usually a service fee associated with this arrangement, and shoppers may not be eligible for deep discounts and sale prices on the same items offered closest to the holiday.

#4 – Marketing tricks

Using one of the oldest tricks in the book, retailers will advertise a “great low price” or a “rock bottom deal” for a certain item when, in reality, the advertised price is identical to the everyday price. Nonetheless, stores will see the item fly off the shelves, as shoppers always want to feel like they got a deal. If you’re in the market for a certain item, do some comparison shopping online to see what the average price is across several retailers. This way, you will have a better sense of what is a true deal and what is just a marketing ploy.

#3 – ‘Group’ sales

Which sounds better: three items for $75 or one item for $25? Believe it or not, stores often advertise items in groups to make shoppers believe they must buy a certain number to qualify for the sale price. However, if you only came to the store for one item, buying three at a great price is actually a loss for you. If you really only need one of something, you are better off paying the retail price for a single unit than purchasing three at a better per-unit value. And, many times, the store will offer the same per-unit price whether you buy one or three. The store just doesn’t want you to know that.

#2 – Rewards points and loyalty programs

Eager to force brand loyalty on customers, stores have found a surefire way to entice customers to quit comparison shopping in favor of gathering reward points and special gifts. In other words, when shoppers start to see points pile up from a certain retailer, they often begin to forgo other — sometimes less expensive — options. While signing up for a reward program is often harmless in and of itself, falling for this type of savings illusion can mean missing a real bargain elsewhere. 

#1 – Store credit cards

During the holidays, the lure of a store credit card can be overwhelming. Stores offer all sorts of gimmicks to get shoppers to give in at the register and fill out an application. Retailers may offer cash back, 20 percent off a purchase, high-value coupons or even free merchandise. However, the shopper almost always comes out on the losing end of this deal.

According to a recent survey, the average APR for retail credit cards is now around 23 percent, which is much higher than that of general use credit cards. Consider this scenario: A store clerk convinces you to open a retail credit card so you get 15 percent off your purchase that day. You get a blouse originally priced at $100 for $85. Great! However, you spend way over your holiday budget in December, and when the bill comes in January, you aren’t able to pay off the balance you’ve racked up. The card’s 23 percent APR equates to $19.55 in interest, and that $85 blouse actually ends up costing $104.55. Not only have you blown your original savings, but you also now have a credit card bill that will continue to accrue interest each month until you pay it off.

Suffice it to say that retail card interest bills can quickly negate any savings, offers, gimmicks, coupons or free swag offered at the original point of sale. In most cases, the shopper will end up paying more for the item than it was originally worth — all to the store’s delight.