Consumers are about to be bombarded with sales – from Click Frenzy, to Black Friday and Cyber Monday in coming weeks.
While the sales are an opportunity for people to get some great deals, there are a few traps to watch out for.
Consumers will be constantly hit with tempting sales right through until the end of the year, associate professor of finance at RMIT’s School of Economics, Finance and Marketing, Dr Angel Zhong, says.
Even if you’re not out shopping, it’s pretty hard to miss the advertising online and on social media.
The eye-catching advertisements for these sales are a tactic used to create ‘FOMO’ – or ‘fear of missing out’ – and often these tactics drum up a false sense of demand.
“When you see so many deals and sales going on, the consumer will feel like it seems everyone is buying,” Dr Zhong told The New Daily.
It’s actually a human behaviour called herding that drives our desire to buy when there’s sales all around, she said.
“If you see others are buying or if you feel that others are buying – you kind of feel if you don’t buy and there are major sales going on, then you’re missing out.”
As we head into these sales, it’s important to remember they are designed by consumer research experts to exploit psychological barriers or biases.
How to avoid the ‘traps’
Dr Zhong advises consumers to plan ahead. If you go into these sales that often go on for days without a plan, then you risk buying things you don’t need.
“So just plan ahead, find out what you really need and budget, because it is about planning on what you need and how much you can afford,” she said.
Often, companies will say there is only a limited number of items in stock to create a sense of urgency, Dr Zhong said.
To counter this, Dr Zhong said it is that important people research what they are buying to see whether the particular item is limited.
If you’re buying something – always read the fine print.
“If you buy something on sale, what are the terms and conditions? Especially when it comes to returns and refunds,” she said, adding this is especially the case when buying something online.
Sometimes when the sales are on, the prices will be jacked up. A $200 item might be advertised as 50 per cent off, but in reality, it was previously $100, Dr Zhong warns.
Consumers should always research what they are buying. She suggests looking up the exact item on Google to try and work out what the normal price is.
Other than Google, Dr Zhong suggests using free resources online such as Oz Bargain and Shop Bot to make sure you’re making smart buying decisions.
If you are thinking about using a buy now, pay later service when taking advantage of the sales, it’s important to remember you’re still borrowing money.
“If you’re not good at multitasking, you may forget to repay some of them, so then the late payment fee could become really heavy,” Dr Zhong said.
“Also because that gives you an official channel of borrowing, you may overspend because you have extra borrowing capacity, or so it seems.”
Take advantage of the sales
Right now, Australians are worried about their finances and while the sales may tempt you to buy things you don’t really need, they can be a great chance to save a bit of money.
“We are now in a cost-of-living crisis – it is putting real pressure on a lot of Australian households,” Dr Zhong said.
“In such a difficult environment, sales are even more important and more popular, especially with the festive season just around the corner.”
While consumers should be mindful and avoid falling into traps, they should take advantage of the sales to get a good deal, Dr Zhong said.
She’s feeling optimistic about the Click Frenzy and Black Friday sales and says that it’s a great time to get all your gifts ahead of Christmas.
As for the festive season, Dr Zhong suggests two simple steps to keep in mind.
“You can empower yourself financially and achieve financial wellbeing [by] long-term budgeting and planning ahead.”
