Archive for the ‘Retail’ Category

Where is My Stimulus Check and How Do I Spend It?

Thursday, May 1st, 2008

If you have not filed taxes you will not be getting a stimulus check.  You must file taxes and select a check from Uncle Sam or a direct deposit to get the money thrown your way.

Also, there is another alert you might want to watch out for.  Identity thieves will have a new cash cow to go after when Billions of dollars flood the streets as free money from the U.S. Government this week.  You may want to check your mailbox frequently if you requested a check and make sure no one can steal it.  I have seen people stealing out of mailboxes when they know other peoples checks or credit cards are arriving in the mail.  Guard your mailbox by getting your mail immediately.

Did you stimulus check arrive this week?

There are many things you can do with the money.  I recommend paying off your debt or mortgage.  The retailers want you to buy, buy, buy.

Wal-Mart will let you cash your stimulus check for free.  Sony is offering $400 discounts on High Definition TV’s.  The number two retailer Home Depot is giving away big discounts on High Efficiency washing machines such as the GE HE’s.

The absolute best way to spend your Stimulus Check?

More important than paying off debt is actually feeding your family and keeping food on the table.  Kroger and Ralph’s will add 10% of the value to the rebate checks in increments of $300 to each gift card.  Albertson’s, SuperValu, and Shop N’ Save will give you an extra $30 for every $300 in rebate checks you put on gift cards.  Your family can look at this as an investment that will earn more than interest in a bank account and keep you eating during a threat of a recession.

Basically, all you have to do is go in your local store and purchase gift cards with your rebate checks and save huge money from that.  My family can spend $200 at least in one grocery trip so it adds up.

Is Cash still King?

Saturday, April 5th, 2008

Don’t let the recent IPO’s of Visa and MasterCard fool you.  There are a few reasons that some refuse to pay on credit or people that have been ripped off because of retailers who went bankrupted such as Sharper Image.  We may have to rethink the “cash is king” syndrome once more.  This explains about gift cards and the potential pitfalls.

Gift cards are a popular choice, both as gifts and even as rewards points and program redemptions. Unfortunately, sometimes this great idea is not as great as it seems. Gift cards can expire, companies can shut down or declare bankruptcy, or a multitude of other situations can arise that can entirely devalue your gift cards. There are several types of gift cards, and some may come with specific conditions, fees or other problems. Know what you are buying before you buy for the smartest gift card shopping…or simply fork over the cash and let the recipient decide how to spend it.

There are two basic types of gift cards. The first are store specific cards. These are the gift cards that you pick up at the check out on your way out the store. They might work at a single store or possibly at several stores; however, the actual options for these cards are rather limited. Some retailers allow you to use their gift cards online, while others do not. General purpose gift cards from Visa, MasterCard or American Express may be used at most retailers; however, there are some limitations, including airline tickets. While these general purpose gift cards offer great flexibility, they may come with many additional fees.

Some gift cards do come with an expiration date. Be certain to note the date if this is the case. You may be able to request a new gift card from retailers if yours expires, but there will be additional fees for this. Also, a few states have disallowed expiration on gift cards, and if you live in one of these states your gift cards will not expire. Service fees may apply when you buy gift cards, depending upon the state in which you live. You also may find that shipping fees for gift cards can be higher than is reasonable. Shop around to avoid these fees. Keep in mind when giving a gift card that businesses do find themselves in bankruptcy proceedings or simply shutting down. In these instances, gift cards may become totally worthless. General purpose gift cards may charge monthly maintenance fees after a certain period, or may charge additional fees for ATM withdrawals.

Gift cards can be a good option if you need an easy and appealing gift, but you should shop smart, or simply give cash to the recipient. Avoid cards with substantial fees, and choose cards that do not expire whenever possible. Be certain that you choose reliable retailers for store specific gift cards, and try to select cards that allow the recipient to shop online or in person for the most versatility.

Payment Plan Pitfalls for Retail Purchases

Wednesday, February 6th, 2008

“Sense of urgency” is one of the most important marketing tactics used by retailers. If they can make their customers believe that they have to buy a product now in order to satisfy an urgent need, they make more money. Creating a sense of urgency is easy—we see a brand new laptop on sale and we immediately want it—but it is more difficult to create the other side of the equation: How can our customers afford it?

Payment plans are the answer and they can be found in every retailer nationwide. No, the laptop doesn’t cost $2,000; it’s only $90 per month for twenty-four months! Nevermind that you’ll actually be paying more for the laptop because of the interest factored in.

There are plenty of opportunities to sign up for payment plans, thus meeting your desire for instant gratification, but should you commit to the terms of the payment agreements? Not always. Without payment plans, most Americans would be homeless and carless and generally without luxuries, but consumers must draw the line somewhere.

The Deception of Payment Plans

The most dangerous pitfall of payment plans is that they are deceptive. They make you feel as though you are hardly spending any money for a rather expensive item, so you don’t bother to factor that purchase into your budget. This is especially true if you put your payment plan on your credit card; not only have you put it out of your mind, but you’ll probably pay double interest.

If you’re going to sign up for a payment plan, consider the end price of the product as well as the monthly payment. How does that compare to the one-time price advertised by the retailer? It is sometimes more economical to simply save enough money to buy the item in one lump sum than to put yourself on a payment plan.

You can also talk with a manager and attempt to negotiate the interest on the payment plan. Sometimes this works and sometimes it’s out of the retailer’s hands. It never hurts to ask, however, and you might be able to swing a better price. After all, the store’s goal is to sell as much product as possible.

Beware the Extended Warranty

Another pitfall of payment plans is what I call the “Extended Warranty Scam”. Not only does the retailer want you to purchase the payment plan, but you are “strongly advised” to purchase the extended warranty as well. Reason being, if you don’t buy the warranty and your item breaks before you’ve finished making payments, you still have to make good on the payment plan and you’ll have to pay for repairs.

Under any payment plan, however, the consumer should receive free repairs for the extent of the payment plan at a minimum. Never purchase both because you’ll be taking money out of your own wallet. Instead, inform the store manager that you won’t buy the product unless the warranty is inclusive; otherwise, you’ll find the product elsewhere.

Longer Credit Terms – Longer Commitment

Since retailers want to sell payment plans as often as possible to collect the interest, they’re going to make the monthly payments as low as possible, which means a longer credit term. For example, 40-year mortgages have only recently been introduced to the real estate market, where twenty years ago, 10-year mortgages were fairly standard. This might seem like a benefit for the consumer, but it is really a sheep dressed in wolf’s clothing.

When you sign up for a longer credit period on a payment plan, you increase the amount of interest you’ll be paying on the item. Not only that, but your obligation is far longer to the retailer, and very few people can predict their financial futures. If you lose your job or are forced to take a pay cut, you still have to make good on the payment plan arrangement.

This is even worse with retailers who offer deals where you make no payments for several months to a year. This is becoming increasingly popular with furniture companies. Do you really want to be paying for your new leather sectional five years down the road? It’s important to think practically when considering payment plan options.

The Bottom Line

When you’re going to buy something anyway, payment plans can be a blessing, but you have to look at it logically. Don’t simply sign up for the first payment plan that presents itself; instead, shop around and find the most favorable terms for your investment. If you have good credit, you might be able to secure a no-interest period or even a no-interest purchase. If you have poor credit, you should be able to find a similar deal with a large down payment.

Debt isn’t something you want to leave to chance, so be smart about your finances. Don’t let fancy signs with low numbers tempt you into a purchase you can’t really afford, and don’t allow hard-sell sales pitches fool you.