20 March 2008 2 Comments Print This Post  Email This Post

Whenever I go to the mall, I see signs for sales: 50 percent off! Today only! Free gift! All those sales are meant to get us worked up into a buying frenzy — after all, the products are cheaper than usual, making this the best time to buy. But a lot of those sales don’t benefit your wallet nearly as much as you hope. The keyword here is sale: a product is on ’sale’ so that the store can make a ’sale.’ It may be semantics, but the word ’sale’ doesn’t have such a great connotation for me.

Obviously, a sale on any item you wouldn’t normally buy doesn’t turn that product into a bargain. I think just about every personal finance writer has expressed the sentiment that one shouldn’t buy a product that one normally wouldn’t buy just because it has a 50 percent off tag. But there are plenty of other ’sales’ that wind up costing you more in the long run.

• If you pay for a sale item with your credit card, it isn’t a bargain. Sure, you might pay it off before the end of the month, but plenty of people carry balances from month to month. Is that sale item so much cheaper after you figure in interest payments on your credit card?
• If you have to go out of your way to pick up a sale item, it may no longer be such a great deal. I’ve known people who have driven 30 miles for a sale, but with high gas prices, the item with the higher price tag at the store less than a mile away might actually work out to be cheaper.
• If the store originally marked up prices before starting the sale. I’ve seen it happen with soda pop fairly often: a store is holding a half-price soda sale, but when you look at the price tag, the ‘normal’ price is double what it is when there isn’t a sale on.

Sure, I shop the sales. But I make an effort to calculate the real price of that great deal on a particular gizmo. I think about how long it’s going to take me to get out to the store and back, how much gas I’ll burn, how I’m going to pay for it and whether the store is known for pricing tactics that are likely to annoy me. Half the time, I find that a ‘bargain’ really isn’t such a great price.