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How to Avoid Traps while Spending on Black Friday

This Black Friday, Americans are planning to rein in their spending. However, experts suggest that shoppers do even more planning than usual to avoid busting their budgets. By being mindful of their spending and planning ahead, shoppers can make the most of Black Friday deals without overspending.

November 24, 2022
10 minutes
minute read

This Black Friday, Americans are planning to rein in their spending. However, experts suggest that shoppers do even more planning than usual to avoid busting their budgets. By being mindful of their spending and planning ahead, shoppers can make the most of Black Friday deals without overspending.

Shoppers are planning to be more frugal with their holiday gift giving this year, due to high inflation and economic uncertainty, according to The Conference Board, a nonprofit research organization.

The National Retail Federation expects 166.3 million people to shop in stores and online from Black Friday to Cyber Monday, the largest number since the industry trade group began tracking in 2017. This may derail plans for a more peaceful holiday season, as the pomp of Black Friday and the deluge of online deals and discounts can be overwhelming.

"Most reasonable people would say that it's a good idea not to overindulge, and yet they do," said Mark Cohen, director of retail studies at Columbia Business School and a former Sears executive. While it's easy to get caught up in the joy of gift giving, a spending spree could be riskier this year because of expectations of a recession, he added. Cohen recommends that people take a step back and think about what they can really afford before going on a spending spree this holiday season.

Americans have been using credit cards more this year, even as interest rates have gone up, making it more expensive to carry the debt. Savings rates have also dropped this year, after a historic spike during the pandemic.

Retail experts and financial advisers say there are three red flags to watch out for to make the most of the Black Friday weekend without overspending. First, be aware of doorbuster deals that may be too good to be true. Second, don't let the pressure of limited time and quantities drive you to buy something you don't really need. Finally, be mindful of your budget and stick to your shopping list to avoid impulse purchases.

Black Friday is known for its deep discounts that attract shoppers to line up for hours before stores open. Although deals offered online and in-store have become more similar in recent years, the fear of missing out on Black Friday still drives sales and sometimes irrational behavior, said Mr. Cohen, who oversaw Sears’s Canadian division before joining Columbia.

"You don't need to answer the call on Friday, and you don't need to feel guilty if you don't wake up early enough," Mr. Cohen said. Many of the items that are put on sale have been discounted for a while, he said.

Bryan-Podvin advises shoppers to make a list before they go to the store in order to resist buying items they don't need. She says that being intentional about our shopping can help us avoid regretting purchases later on.

Ms. Bryan-Podvin also recommends unsubscribing to store emails to avoid browsing and decluttering your inbox. This will help you stay focused on what you need and avoid any unnecessary purchases.

"Black Friday is a good reminder of all the email lists we've signed up for during the year," she said.

Retailers offer special deals this time of year for those who sign up for one of their branded credit cards. These discounts can be great as long as shoppers are able to pay the balance off in full, said Hopkins.

According to Bankrate, interest rates on retail cards averaged 26.72%, compared with a 22.66% average on non-retail cards.
Mr. Hopkins advised shoppers to avoid using store cards for purchases they can't afford.

According to data from the Federal Reserve Bank of New York, Americans tend to rack up higher credit-card balances in November and December, and spend the first quarter of the new year paying down their purchases.

Shoppers need to plan for higher prices this holiday season. Although some traditional Black Friday categories, such as apparel and electronics, have been less affected by inflation, higher expenses for travel and food associated with holiday celebrations mean making a new holiday budget this year, according to Mr. Hopkins.

"Many people are probably running budgets in their mind that don't align with what things cost this year," he said.

If you're going to use credit to pay for gifts or holiday travel, it's best to find a card with a promotional zero-interest period. This way, you can consolidate your spending onto one card and avoid paying interest on your purchases. Just be sure to note when the promotional rate ends so you can plan accordingly.

Retailers aren't the only companies looking to boost sales during Black Friday. Resorts, airlines, and especially cruise ships will offer big promotions. But travel deals can trip up shoppers who don't comparison shop or read the terms closely, travel advisers said.

For example, MSC Cruises and Holland America Line are both offering up to 40% off select voyages. However, those deals are just the tip of the iceberg.

Tara Minson, senior vice president of marketing and communications at InteleTravel, said that the offers are not just price-driven. Most of the promotions come with add-ons, such as free drinks packages, unlimited Wi-Fi, onboard credits, and even free additional guests.

A spokesman for Holland America said the cruise line is offering a Black Friday deal that includes prepaid gratuities for stateroom crew. The deal can be combined with the "Have it All" cruise package, which adds Wi-Fi, a visit to one of the line's specialty restaurants, a shore excursion and a beverage package.

Ms. Minson said that such add-ons can make it more challenging to compare offers. Someone who doesn't drink might be leaving money on the table by booking a package that includes unlimited alcoholic beverages.

Additionally, it is important to read the fine print when booking a complex cruise package. Many Black Friday deals include airfare, but experts advise travelers to do their research before booking. For example, those who do not live near a major city may have fewer flight options through the cruise line than if they booked their own flights. If travel plans change, travelers would need to go through the cruise line to alter their flights.

Shoppers should be very careful about booking if they aren’t entirely sure they want to go on a specific itinerary. According to travel expert Ms. Minson, there are many travel deals around Black Friday that are nonrefundable, require prepayment or have blackout dates.

Bryan Curtis
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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