It's the holiday gift-giving season again. Here are ten ways to prevent ho-ho-hos from turning into uh-ohs.
DON'T assume that items on sale are a good deal. Many retailers go out of their way to make you feel like they're offering a great price on whatever you want to buy, whenever you want to buy it. Walk into some stores or check their websites, and almost everything seems to be on sale virtually all the time.
Consider this lawsuit Los Angeles filed against JCPenney, Kohl's, Sears, and Macy's in 2016, accusing the retailers of essentially holding fake sales.
Whether it's 40 percent off, buy-one-get-one-free, a free gift with every purchase or any other type of come-on, you must comparison shop. Take for instance this deal for a three-quart Instant Pot Duo pressure cooker at Kohl's for $89.99. That price supposedly represents a $10 discount off the regular price of $99.99. But the manufacturer's suggested retail price for the same item is $79.95, $20 less than Kohl's "regular" price and $10 less than its sale price. Beyond that, after applying Kohl's 15 percent discount in effect until Dec. 24, the $76.49 net cost is more than $10 higher than the $65.01 deal on Amazon, which, like the Kohl's website, is offering free shipping. Buying from Kohl's might make sense if you'll use the $10 Kohl's cash the retailer is offering on purchases of at least $48 through Dec. 24. But you can spend that $10 only at Kohl's, and you must use it by Jan. 6, restrictions you wouldn't have if you simply purchased from Amazon. Bottom line: All these Kohl's discounts on that one product sound great, but it's not the amazing deal you may have thought it was.
DO use credit cards when shopping. Credit provides the best protection against fraud, misrepresentation, billing errors, non-receipt of shipped items and problems with an item's quality. Use a credit card, and you'll have the right to dispute the charges with the card issuer. That protection is especially important when you're dealing with an unknown online merchant. If you use a debit or prepaid card, check, or, worst of all, cash, it can be much more difficult or impossible to get a refund or otherwise resolve any problems. Of course, before shopping at an unfamiliar merchant, look for a report on the company at the Better Business Bureau. Along with checking the letter grade the BBB has assigned the company, read any complaints , reviews or government actions listed in the BBB report. You also can find out what others are saying by using a web search with the merchant or website name and such terms as "reviews" and "complaints."
DON'T give gift cards. They may have cute pictures and give your gift recipients the feeling that you gave at least some thought to where they like to shop, dine out or get their hair done. But gift cards really are little more than cash with lots of restrictions, including on where you can spend the proceeds. Lots of gift cards end up sitting unused in drawers or wallets. Or they may end up being lost or stolen (many issuers won't replace them). And with so many retailers closing their doors or going out of business, card holders may have few or no outlets where they can even use their cards. (Unfortunately, card issuers aren't required to segregate gift card proceeds to protect them from bankruptcy proceedings. And few, if any, do.) Even bank gift cards, which carry a MasterCard or Visa logo, can be a problem. While your gift recipient can use them at many more locations than retailer gift cards, bank gift cards often have pesky fees that eat away at their value over time. Bottom line: If you can't think of a real gift, give cash or a check. (And if you receive a gift card, use it right away. And if you have the option, register it with the card issuer so it can be replaced if lost or stolen.
DO check retailer terms and conditions. This may seem obvious, but a lot can be hiding in the nitty-gritty details. Take, for instance, the electronics retailer Best Buy. For purchases from Oct. 28 to Dec. 28, Best Buy expands its paltry 15-day return policy to a fixed date of January 12, 2019 for most items (with longer periods for Best Buy Elite and Elite Plus members). But the return period for cell phones and anything else that has to be activated is just 14 days. And there are some items, including drones, DSLR cameras and lenses and electric scooters, that, if opened, are subject to the retailer's 15 percent restocking fee in most states.
When shopping online, another important thing to know is who must pay the shipping charges if you need to return a gift. With some retailers, if you got free shipping to begin with, you not only will have to pay the return-shipping charges, but the store also will deduct the cost of the initial free shipping from your refund. Also look at a retailer's policy on defective merchandise. Don't assume that a store will let you return defective items for a refund or replacement. Consider this language from the website LivingDirect: "We will not replace or exchange defective products that fall under the manufacturer's warranty coverage." Retailers should stand behind the products they sell, and in some states they legally cannot disclaim that responsibility, no matter what the fine print says. After all, you're giving your money to the store, not to the manufacturer, which may have separate obligations (more on that in a future post). Finally, some retailers don't allow returns of certain products, such as seasonal items or specific brands. So check.
DON'T blindly sign up for deferred interest offers. I recently devoted an entire post to this subject. The bottom line is that these deals, which let you buy today and pay over time interest-free, often are filled with gotchas that can end up costing you a lot. That's because the interest accrues during the interest-free period, often at double-digit rates. And if you're late with a payment or miss one, or if you haven't paid off the purchase amount by the due date, you'll typically be on the hook for the entire amount, including the interest. A recent study by the website WalletHub found that 82 percent of consumers don't understand how deferred interest programs work. And that's no surprise. WalletHub also found that many retailer websites poorly disclose the terms and conditions that apply to these deals.
DO make a gift budget. You've probably heard this before, and it sounds like a lot of work. But your friends and family don't want you going into debt for the holidays. Figure out how much you can spend, and keep track. Use a cell phone app, computer spreadsheet or just a pad and pen. And do a little planning to hold down the amount you spend. There are lots of gifts that make a big impression but don't cost much, maybe a nice bottle of maple syrup or olive oil, a gift basket of premium pasta and pasta sauces, or a pound or two of premium coffee (maybe add a mug or two). If you find you can't afford much, consider giving services that cost little or nothing. Make up a coupon that grandma can redeem to have you wash and detail her car. Or create one that your sister and brother-in-law can use to get you to babysit the kids. There are so many ideas that won't empty your wallet and that just might be the best gifts your friends and family receive this season!
DON'T give charitable donations. It sounds warm and fuzzy, but when you give a charitable donation in someone's name, that really isn't a gift to that person at all, especially if he or she didn't request it. And while your gift recipient might smile politely, inside they'll be saying "whatever," just like George Costanza's coworkers did in that Seinfeld episode in which his office "gifts" turned out to be donations to a very bogus "The Human Fund" charity. So save it for Festivus, and give a real gift instead. At least make sure that a donation is what your gifts recipients really want. And even then, it's best to hand over the money and let them make the donation directly. That way, they will get the benefit of any tax break (if you make the donation, the tax break goes to you). And who knows? They might just change their minds and quietly buy something they want or need.
DO give your gift recipient a receipt. Receipts often are needed for returning or exchanging an item and for making a warranty claim. Stores may allow for non-receipt returns, but your gift recipient likely will receive only the lowest recent selling price, not necessarily the amount you paid. Gift receipts are one option. They typically provide a store credit to the person making the return, not a refund. The actual store receipt may entitle them to cash. But if you used a credit card, the refund likely will go back to your card, not to your gift recipient. Of course, you always can return the item yourself.
DON'T open store charge accounts without careful consideration. Many retailers offer big savings to entice you to apply for their charge cards. It might be a one-time discount or an ongoing one that you get whenever you shop. But applying for one or more new lines of credit likely will ding your credit score temporarily. It probably won't reduce it much, but if you're planning to take out a mortgage or another type of loan any time soon, it could affect your interest rate. Similarly, if your car insurance is about to renew, you could end up with a bigger bill. That's because insurers often consider credit scores when issuing and renewing policies. So think before applying.
DO be careful about buying at popup stores. Unless the seller has a regular, permanent physical location or website, it could be difficult or impossible to return or exchange an item, even if it's defective. So before buying, find out how you can go about contacting the seller and whether there's a manufacturer's warranty on anything you buy. And of course use a credit card for the purchase.
DON'T assume that items on sale are a good deal. Many retailers go out of their way to make you feel like they're offering a great price on whatever you want to buy, whenever you want to buy it. Walk into some stores or check their websites, and almost everything seems to be on sale virtually all the time. Consider this lawsuit Los Angeles filed against JCPenney, Kohl's, Sears, and Macy's in 2016, accusing the retailers of essentially holding fake sales.
Whether it's 40 percent off, buy-one-get-one-free, a free gift with every purchase or any other type of come-on, you must comparison shop. Take for instance this deal for a three-quart Instant Pot Duo pressure cooker at Kohl's for $89.99. That price supposedly represents a $10 discount off the regular price of $99.99. But the manufacturer's suggested retail price for the same item is $79.95, $20 less than Kohl's "regular" price and $10 less than its sale price. Beyond that, after applying Kohl's 15 percent discount in effect until Dec. 24, the $76.49 net cost is more than $10 higher than the $65.01 deal on Amazon, which, like the Kohl's website, is offering free shipping. Buying from Kohl's might make sense if you'll use the $10 Kohl's cash the retailer is offering on purchases of at least $48 through Dec. 24. But you can spend that $10 only at Kohl's, and you must use it by Jan. 6, restrictions you wouldn't have if you simply purchased from Amazon. Bottom line: All these Kohl's discounts on that one product sound great, but it's not the amazing deal you may have thought it was.
DO use credit cards when shopping. Credit provides the best protection against fraud, misrepresentation, billing errors, non-receipt of shipped items and problems with an item's quality. Use a credit card, and you'll have the right to dispute the charges with the card issuer. That protection is especially important when you're dealing with an unknown online merchant. If you use a debit or prepaid card, check, or, worst of all, cash, it can be much more difficult or impossible to get a refund or otherwise resolve any problems. Of course, before shopping at an unfamiliar merchant, look for a report on the company at the Better Business Bureau. Along with checking the letter grade the BBB has assigned the company, read any complaints , reviews or government actions listed in the BBB report. You also can find out what others are saying by using a web search with the merchant or website name and such terms as "reviews" and "complaints."
DON'T give gift cards. They may have cute pictures and give your gift recipients the feeling that you gave at least some thought to where they like to shop, dine out or get their hair done. But gift cards really are little more than cash with lots of restrictions, including on where you can spend the proceeds. Lots of gift cards end up sitting unused in drawers or wallets. Or they may end up being lost or stolen (many issuers won't replace them). And with so many retailers closing their doors or going out of business, card holders may have few or no outlets where they can even use their cards. (Unfortunately, card issuers aren't required to segregate gift card proceeds to protect them from bankruptcy proceedings. And few, if any, do.) Even bank gift cards, which carry a MasterCard or Visa logo, can be a problem. While your gift recipient can use them at many more locations than retailer gift cards, bank gift cards often have pesky fees that eat away at their value over time. Bottom line: If you can't think of a real gift, give cash or a check. (And if you receive a gift card, use it right away. And if you have the option, register it with the card issuer so it can be replaced if lost or stolen.
DO check retailer terms and conditions. This may seem obvious, but a lot can be hiding in the nitty-gritty details. Take, for instance, the electronics retailer Best Buy. For purchases from Oct. 28 to Dec. 28, Best Buy expands its paltry 15-day return policy to a fixed date of January 12, 2019 for most items (with longer periods for Best Buy Elite and Elite Plus members). But the return period for cell phones and anything else that has to be activated is just 14 days. And there are some items, including drones, DSLR cameras and lenses and electric scooters, that, if opened, are subject to the retailer's 15 percent restocking fee in most states.
When shopping online, another important thing to know is who must pay the shipping charges if you need to return a gift. With some retailers, if you got free shipping to begin with, you not only will have to pay the return-shipping charges, but the store also will deduct the cost of the initial free shipping from your refund. Also look at a retailer's policy on defective merchandise. Don't assume that a store will let you return defective items for a refund or replacement. Consider this language from the website LivingDirect: "We will not replace or exchange defective products that fall under the manufacturer's warranty coverage." Retailers should stand behind the products they sell, and in some states they legally cannot disclaim that responsibility, no matter what the fine print says. After all, you're giving your money to the store, not to the manufacturer, which may have separate obligations (more on that in a future post). Finally, some retailers don't allow returns of certain products, such as seasonal items or specific brands. So check.
DON'T blindly sign up for deferred interest offers. I recently devoted an entire post to this subject. The bottom line is that these deals, which let you buy today and pay over time interest-free, often are filled with gotchas that can end up costing you a lot. That's because the interest accrues during the interest-free period, often at double-digit rates. And if you're late with a payment or miss one, or if you haven't paid off the purchase amount by the due date, you'll typically be on the hook for the entire amount, including the interest. A recent study by the website WalletHub found that 82 percent of consumers don't understand how deferred interest programs work. And that's no surprise. WalletHub also found that many retailer websites poorly disclose the terms and conditions that apply to these deals.
DO make a gift budget. You've probably heard this before, and it sounds like a lot of work. But your friends and family don't want you going into debt for the holidays. Figure out how much you can spend, and keep track. Use a cell phone app, computer spreadsheet or just a pad and pen. And do a little planning to hold down the amount you spend. There are lots of gifts that make a big impression but don't cost much, maybe a nice bottle of maple syrup or olive oil, a gift basket of premium pasta and pasta sauces, or a pound or two of premium coffee (maybe add a mug or two). If you find you can't afford much, consider giving services that cost little or nothing. Make up a coupon that grandma can redeem to have you wash and detail her car. Or create one that your sister and brother-in-law can use to get you to babysit the kids. There are so many ideas that won't empty your wallet and that just might be the best gifts your friends and family receive this season!
DON'T give charitable donations. It sounds warm and fuzzy, but when you give a charitable donation in someone's name, that really isn't a gift to that person at all, especially if he or she didn't request it. And while your gift recipient might smile politely, inside they'll be saying "whatever," just like George Costanza's coworkers did in that Seinfeld episode in which his office "gifts" turned out to be donations to a very bogus "The Human Fund" charity. So save it for Festivus, and give a real gift instead. At least make sure that a donation is what your gifts recipients really want. And even then, it's best to hand over the money and let them make the donation directly. That way, they will get the benefit of any tax break (if you make the donation, the tax break goes to you). And who knows? They might just change their minds and quietly buy something they want or need.
DO give your gift recipient a receipt. Receipts often are needed for returning or exchanging an item and for making a warranty claim. Stores may allow for non-receipt returns, but your gift recipient likely will receive only the lowest recent selling price, not necessarily the amount you paid. Gift receipts are one option. They typically provide a store credit to the person making the return, not a refund. The actual store receipt may entitle them to cash. But if you used a credit card, the refund likely will go back to your card, not to your gift recipient. Of course, you always can return the item yourself.
DON'T open store charge accounts without careful consideration. Many retailers offer big savings to entice you to apply for their charge cards. It might be a one-time discount or an ongoing one that you get whenever you shop. But applying for one or more new lines of credit likely will ding your credit score temporarily. It probably won't reduce it much, but if you're planning to take out a mortgage or another type of loan any time soon, it could affect your interest rate. Similarly, if your car insurance is about to renew, you could end up with a bigger bill. That's because insurers often consider credit scores when issuing and renewing policies. So think before applying.
DO be careful about buying at popup stores. Unless the seller has a regular, permanent physical location or website, it could be difficult or impossible to return or exchange an item, even if it's defective. So before buying, find out how you can go about contacting the seller and whether there's a manufacturer's warranty on anything you buy. And of course use a credit card for the purchase.
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