Black Friday, Sweet Deals
Folks, the mother of all deals, Black Friday, is just around the corner.
An aficionado of budgeting, I am always on the lookout for deals and scout for sales. Well folks, the mother of all deals, Black Friday, is just around the corner.
Black Friday is the Friday following Thanksgiving Day, which officially kicks off the Christmas shopping season, when malls and stores are mobbed. On this day, many retail giants introduce early bird specials, door buster freebies and savings of up to 50-70% on sale items. We also now have Cyber Monday, a neologism for the Monday immediately following Black Friday, which marks the beginning of the Christmas online shopping season.
Why companies give big discount just on this day?
The day marks the start of the Christmas shopping season and every business is out to take advantage to close the year on a strong note. In addition, many manufacturers want to get rid of old stock to make way for new models or to make a splash with new products. Many companies offer mail-in rebates, which allow them to book income for the quarter, while the rebate discount will not pass to the customer for 6-8 weeks. This allows them to post profits for the quarter, gain interest on the amount and only account the expense on discounts in the following quarter.
Watch the Mail-in Rebates
Marketing professor Sridhar Moorthy, who studies consumer behavior, says, manufacturers are banking that many consumers will not redeem their rebates: “From the manufacturer’s point of view, they’re having their cake and eating it too. They’ve gotten you to buy the product, because you thought you would redeem the rebate. Then once you went home, you forgot about the rebate. You became too busy, or you found that all the requirements that you’re supposed to fill out are actually quite difficult for you to do with special requirements like UPC cut outs on electronic items makes it not so easy, so you don’t turn in the rebate. That’s why manufacturers would rather rebate than give you a discount at the cash register.”
Companies complicate the mail-in rebate process, with e.g. deadlines. Redemption rates vary from 2% to 50% depending on the size of the rebate – a large, $500 rebate, example, motivates more people to redeem. Another University of Florida study found that shorter redemption periods increase the redemption rate as they lull fewer consumers to procrastinate. Many of these rebate programs are designed and operated by third party companies, who are motivated to minimize rebate payouts.
What to look out for this year?
For the Best Deals
Here are some pointers for the best Black Friday deals.
Before the Purchase
1. Prepare a list of items you really need, so you aren’t distracted by attractive sales for items you later regret buying.
2. Check out the deals in advance in store flyers, or websites like bfads.net, blackfriday.info, blackfridayads.com, theblackfriday.com, etc. Some of these websites publish leaked Black Friday ads from major stores days, even weeks, in advance, so you can get a sneak peek into upcoming sales for items you are currently contemplating and may be in a position to put off.
3. Compare the deals from different stores. You might also want to run the deals through comparison-shopping websites like mysimon.com, nextag.com or shopzilla.com.
4. Prepare a shortlist of items from the deals offered.
5. Team up with friends; plan to be in line early and spread across different stores.
After the Purchase.
2. If you purchase items with mail in rebates, make sure you retain UPC codes, purchase receipts and rebate forms.
3. Copy all documents prior to submitting them for rebates before the deadline.
4. Some stores offer online rebate submission, which is not only easier, but it also makes it possible to check its status.
5. If you don’t get your rebate in 6-8 weeks, you can file a compliant with the federal trade commission website https://www.ftccomplaintassistant.gov/
6. Most rebates take 6 to 8 weeks, although I have received some in a month.
This year will be tricky as many companies are on the ropes as a result of the financial meltdown. It will be curious to find out how they balance the need to gin up their margins in the face of slackening demand from consumers who are also hurting and cutting back. Will this result in greater or fewer bargains? You’ll find out on Black Friday.