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Will you really be saving money on Black Friday?

Will you really be saving money on Black Friday?

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Black Friday is a major highlight on countless people’s calendars – and for good reason: it signals the start of the festive season and holidays to come. It’s also the one time of the year when just about everything seems to be on sale.

With yet another interest rate hike expected the day before Black Friday, Farzana Botha, Segment Solutions Manager at Sanlam Savings, warns that these deals might not be all they’re cut out to be.

Botha shares five things you need to know before you splurge on the biggest shopping day of the year:

1. Determine wants vs. needs

It’s gratifying to get a discount on something you need or have wanted for a while, says Botha. It makes sense to delay a purchase until you are confident the item is reasonably marked down and within your budget. “To do this, you need to know if an item is truly discounted or if the base price was inflated before the discount was applied. This requires some homework.

For example, if you want to buy a new TV, monitor the average price, and compare prices online and in-store so that you have a benchmark. That way, when it goes on sale, you know just how much you are saving – if anything," explains Botha. You should also budget for these items to avoid overspending.

Buying something you want every now and then is beneficial psychologically, says Botha. “It allows you to feel a sense of accomplishment and freedom. But it’s still important to plan and save for these purchases so that you can enjoy them without guilt or the long-term consequence of paying off the interest incurred if you bought the item on credit. True freedom is being debt-free.”

2. Be cautious of interest rates

Using credit or a loan to buy your item means you’ll be paying interest on that amount until the loan is paid off, says Botha. “Depending on the interest rate, this could end up being double the price, meaning you’re not actually getting a good deal.”

“In comparison, if I choose to lay-by an item that isn’t on sale, I will pay interest-free instalments and have the item once that amount is paid. This is better than buying the item on sale using a credit card or loan,” she says.

If you’re fortunate, Farzana adds, you’ll find an item on sale, and the retailer might allow you to buy on lay-by anyway.

3. Don’t be duped

Many retailers try to get rid of unwanted stock, pushing brands that have not performed well during the year. When it comes to tech, crazy deals might be an indication that new, improved models are about to be released. Once again, doing thorough research will help to ensure you’re investing in high-quality items that will last you for more than one season.

Bonus tip: Examine return policies as these can be quite different for Black Friday specials. And be sure to retain all receipts and proof of payments.

4. Choose when, and how, to shop

Many retailers hype up the idea that the best deals are found in-store, but there will be many major deals online too. This allows you to choose when and how you shop. Keep this in mind, as it's likely to be one of the busiest Black Friday seasons ever, thanks to the worst of the pandemic finally being behind us.

Bonus tip: Online shopping also gives you the opportunity to save items in your wishlist or cart before checking out. This way you can think carefully about each purchase and compare prices with other retailers.

5. Avoid distraction tactics

Some retailers offer one or two truly exceptional deals to create the impression that all other deals are equally good. Known as the halo effect, this coaxes customers to buy more items. People should also be on the lookout for so-called ‘limited’ deals that are available during other sales throughout the year. This sense of scarcity is used to instil FOMO.

“Black Friday does offer some very good deals, but many of these could be found at other times of the year if you search and compare prices. Do your homework so you don’t fall prey to sale periods,” concludes Botha.

BUSINESS REPORT

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