Are you so focused on getting a discount that you miss the big picture?

Everyone loves getting a deal no matter what they are buying. I got a great price, it was a steal of a deal, it was on sale, etc., etc. are common sayings we hear quite often from family, friends and coworkers on a regular basis.  But…before you jump up and down in glee there are things you may want to know…if your actually getting as good as deal as you think you are.

Lets examine some of the areas where people may be lulled into thinking they are getting a great deal when they may not be.

Homes.  Some people are so focused on getting the cheapest price possible that they forget about over all construction quality and long term maintenance/repair costs. A good deal on a poorly built home that requires thousands of dollars in repairs or renovations may end up costing you more than if you would have paid more for a very well built home that requires less maintenance/repairs over the long run. Try to hire a home inspector that is very, very, thorough so you can avoid buying the “deal” that turns out to be a money pit. 

Clothing, shoes, etc.  Examine the quality of the item carefully. Thin material, loose threads/buttons, unfinished seams, hems falling apart, gaps where the sole of the shoe meets the leather, etc. These items may fall apart after wearing them for a short time.  Instead of buying many “deals” that fall apart quickly you may be better off waiting for a higher quality item to go on sale or buying higher quality second hand items that will last for a much longer time period.  If you find yourself buying things that fall apart or don’t last very long, try to calculate how much you are spending on all these items and how often you are replacing them.  You may be paying out a lot more over time than if you would of bought higher quality items originally.

Home Renovations.  The cheapest quote may not be the best quality job.  When you go to sell your home, buyers may look at a poor quality renovation job as a new renovation project and deduct higher amounts off their offer because of it.

2 for 1 deals – Grocery stores are famous for this one.  The buy one get one free is usually based on paying full price for the first item and getting the second one free.  A lot of times the same item is advertised on sale for a lower price a week before or after the 2 for 1 deal is advertised. 

Meals – Special discount coupons or two for one meal deals may require you to purchase beverages. Some restaurants have high mark ups on beverages and charge a lot for them, that is how they make their profit. If you normally drink water with your meals, ordering two meals at regular price with water may actually cost less than the meal deals that require you to purchase beverages with them.

Manufacturers Suggested Retail Price or MSRP – This represents the “maximum” product price, it is not the recommended retail selling price.  You will see MSRP on everything from electronics, to furniture, to automobiles, etc.  Seeing a lower hand written price for $50.00 off the manufacturers suggested retail price is not a deal. 

Automobiles.  Beware of red tag sales, family/employee pricing sales. Profits at dealers are actually higher during these times than at other times.  People mistakenly assume they will save a lot of money during these special sales or get a better discount than shopping at other times of the month, not necessarily so. The best time to shop for a vehicle is the last day of the month, late in the day when the sales staff is tired.  The dealers want to close their books and want good sales quotas.

Furniture. There is always room for additional discounts even if the item appears as if it is on sale, it pays to ask and shop around. MSRP pricing with hand written prices below the MSRP is very common at furniture stores. Tent sales involve merchandise that is damaged, has been discontinued or clear out items the store will no longer be caring because of poor sales figures.  Always try to get additional discounts on tent sale items or on floor models that are for sale, because these are items that the store really, really, wants to get rid of. 

Jewelry. There is a very high mark up on jewelry items.  The best time to buy jewelry is usually May, but June through August is good too.  Most people get engaged at Christmas and Valentines or give jewelry as gifts at this time.  Discounts and/or quality of items on sale will be limited during these times.

Percentages off the sale price, percentages off the original price.  The bate and switch game that some retail stores play to clear end of season merchandise. At first you will see a sign 30% off the last marked sale prices, then you will see a 40% off sign, but 40% discount is taken on the original price and all the sale price tags have now been removed.  This item may now cost more at 40% off the originally price than it did when it was 30% off the last marked sale price.  A higher discount percentage off the original price may not be the best deal, it really depends on the type of store you are dealing with.

Price matching guarantees.  The majority of people are lulled into a false sense of security when they see the words: “we will match our competitors prices, we will beat our competitors prices by 10%”, etc. Do you know the majority of people don’t bother to check if the competitors are actually offering better prices than the store they are buying the merchandise from?  With so many search engines at your finger tips, it may pay to shop around.

Remember…

MSRP is Manufacturers “Suggested” Retail Price.  A suggestion is just a suggestion, not the price you should be paying.

High prices can hide in bundle type packages and it may be cheaper to buy the items individually than in bundle packages. 

Manufacturers will set MAP (minimum advertised price)  That is why you may see brand names left out of advertisements and generic words like “plasma tv’s on sale”.  The retailer may actually be selling the manufacturers tv for less than the manufacturer will let them advertise the item on sale for.

When items are really cheap, they may be at the end of their life cycle, seasonal, discontinued or just plain old.  Dollar/liquidation stores thrive on selling old stock, check for expiry dates.

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2 Comments (+add yours?)

  1. coconews
    Jul 30, 2008 @ 13:49:37

    Have you fallen for a deal that didn’t turn out to be such a great deal after all?

    I have, my friends and relatives have, hasn’t everybody?

    I still remember those dollar store cookies calling out to me because the picture on the package looked oh, so yummy. I noticed there was no expiry date on the package, but the yummy picture on the package took control of my senses so I bought them anyway. Big mistake, old, stale and not so yummy.

  2. Pam
    Jul 31, 2008 @ 08:38:26

    Good info for saving a few bucks on everything.

    I must admit my relatives have gotten sucked into the vortex of those car sale specials. One of my friends bought the same model car as one of my family members at the same dealership near month end and got a bigger discount than my family members did on the employee pricing sale.

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