As featured in BNet Business Network.
Holiday season shopping is underway, and with all the deals and “steals” how can you be the smartest shopper in this down economy? This season is expected to be the worst in 20 years. Some of the biggest trends this season, good and bad include:
- Increase in Online Shopping: Online shopping is expected to rise 33% this season, due to time and shipping savings this season. Online retailers are making it easier to shop for and return items purchased online by offering free shipping, easy returns and customer reviews. Rise in matching prices online. Online sales will decrease because returns are expected to be high. Watch out for privacy policies and sharing your personal information online.
- Decrease in Credit Card Spending: Store and bank credit cards are lowering credit card limits. Department stores like Nordstrom and Target are expecting to do a bigger credit card business due to penalties, limits and interest rates being charged by banks, but overall, spending on cards will be less. $30 fees will be charged if you go over the limit, in many cases.
- Stricter Return Policies: Keep your receipts and gift receipt, but ask about quick sale adjustments in advance of the holidays to get the best overall prices. Without a gift receipt most stores are giving refunds only to the gift giver.
- Increase in Sale Shopping: 60% of consumers will shop sales only, but there will only be a 2% sale increase this year. Return policies will be stricter for sale items, especially for electronics and popular, trendy items.
- Return to the Post-Depression Layaway Plan: Paying a little as the weeks get closer to the holidays is making a smart comeback. Caveat: According to the FTC there will be fees charged for “returning” an item that is either only partially paid for or fully paid for.
- More difficult to convert gift cards to cash: Department stores that gave cash conversions to gift cards are, at best, only offering refunds to the gift giver. Check your retailer’s policies on conversion.
- Increase in Shipping Costs: Shipping prices have gone up with the fuel costs increasing. Expect to pay 10-15% of the cost of goods (and that’s only 1 way!)
- 25% Expected Decrease in Bank Gift Cards: Spending less this holiday season means a decrease in spending for gift cards, in general, and especially for bank gift cards. Most gift cards will be purchased at discount stores, like Wal-Mart and Costco, and more gift cards will be used at pharmacies and everyday stores, not luxury retailers. Good news is that most expiration dates have been lifted. Bad news: service charges of $2-3 per month on any unused balances after 12 months the industry norm. Fees to buy bank gift cards are $4-5. Caveat: many bank gift cards can’t be used for online purchases. Check before shopping online.
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