It is strange that we have Black Friday so close to Thanksgiving. Going from a time of thankfulness into rapid intense materialistic fueled buying, that the Wall Street Journal reported is just a rip-off anyway, more on that in a moment. Last year about this time, I wrote about Thanksgiving, because I think it is one of my favorite Holidays of the year. It is a great time to be thankful for all of the good things that we have, and for the challenges that made us better. Having a thankful attitude is much healthier than any other way to think: it is felt contentment. It is at the core of happiness. Although having a positive attitude is good, but sometimes that even leads people to depression. Funny, a book came out about a year ago that exposed this truth: The power of negative thinking, I wrote about that too. So before you jump from Thanksgiving into Black Friday, consider the following:
The Wall Street Journal reported today in Black Friday : A Retail Illusion, The Dirty Secret of Black Friday Discounts, is merely a manipulative ploy to get you to buy things you think are at the lowest cost of the year. In actuality, retailers are really smart, they know how to price things, and adjust the prices in anticipation of low Holiday sales, just to trick you into buying.
Is the practice legal? According to the Federal Trade Commission, it is a violation to artificially increase a price just to run it lower on sale. For example, you can’t advertise the price of a car for $25,000 and sell it with a $5,000 discount from the beginning, unless it was advertised for $25,000 and sold it at that regular price before. How do retailers get away with it? They know the law and they carefully do all kinds of little tricks to not cross the line. I imagine if a store offered a men’s dress suit online for or in the back of their store for a while at one price, with the full intent of later increasing the display and inventory, to move it out front for 40% off, then they could skirt the law. Too bad most major retailers play the sale game to compel sales. When some do it, it seems all have to play the game, or face less business since everyone is doing it. Why don’t retailers just have high credibility and offer things at their lowest price already, and only discount at the end of a season to blow out inventory?
JC Penny tried to just have a low price, but they failed. Earlier this year, new management (that is no longer there), tried to just price things competitively, save money on sales advertisement and other promotions, believing the consumer would see the value and buy. This approach failed. Other retailers and JC Penny learned that people want the feeling of a sale and discounts, since it makes them feel emotionally better at the cash register.
Low price teaser products are offered in small quantities to get you into the store. For example retailers like Best Buy will probably offer a HD TV for a deep discount, just to get you through the door. They might not make any money it on it, but once you are in there, you will buy probably buy a CD, computer, DVD player, game system, Cell phone (and service) or appliance. But who are you buying those things for?
Black Friday is not just for gift giving, since many people for themselves at those sales. This fact breaks many people’s Holiday budgets and adds a lot of money to retailer’s bottom line (and your credit card balance). If you are on a tight budget, watch out for these temptations. It always kills me to see….
People wait in line for days for the special teaser items. I have heard reports that people have been waiting in front of some stores for more than a week already, just to save a couple of hundred dollars on some piece of what will some day be junk! Wouldn’t those people have been much better off, working a part-time job for those days, wouldn’t they have more money in their pocket from a paycheck and from not buying things? Yes.
Can you still get some great deals on Black Friday? Yes you can, but take your smart phone if you have one, to compare prices online, to make sure you are not getting fooled (some stores price match to online prices). If they run out, because you researched it and delayed shopping for it for a day or two, so what, there will be other sales before 12/25. The competition is fierce, and retailers will be competing. However, know what is a good deal before you buy, don’t buy into the…
Back Friday hype and hysteria. Instead of spending all your time fighting the crowds, traffic and for parking places; relax. I work too hard to spend all my day-off time doing something that literally gives me a headache. You can tell I don’t like to shop to begin with, but…
If you enjoy Black Friday shopping because it kick starts your Holiday spirit, then go for it, but have a budget; a list of the people, things, and price limits. Also, talk to your spouse or accountability partner before you go, and tell them you are going to call them for emotional support before you go off budget. It is good to have a checks and balances person, to avoid impulse spending and to get their opinion on a price before you buy.
I hope you have a great Thanksgiving!