Thoughts While Walking in the City: People Shopping or Not

While I went around walking throughout the city, I noticed that stores all over had markdowns. People did a lot of browsing and window shopping but no one was really spending a lot of money. The lines in the cash register was simply not long. Stores however use every ruse and trick in the book to lure you into the store. The Gap on 23rd and 8Th had this markdown: 50% off and take an additional 25%. People are rushing in thinking that they are getting 75% off the merchandise... NOOOOO! that's not the way it works folks.

Here is some basic financial Literacy for you. If you are buy a shirt that retails for $100, you would think the final price would be $25, right? Well, we wish. In reality, if it cost $100, 50% off would mean its initial sale price is $50. An added 25% off of the $50 translates to an additional discount of $12.50. So the shirt actually costs you $37.50, as opposed to $25. That's quite a price difference. Now if you look at it from the perspective of $100 to $37.50 and you are OK with that, then great. I look at it as the retailer being slick and getting an added $12.50 out of my pocket by going about in the the manner they placed the discount...sneaky!

Rebates is another scam... You purchase the item for $100.00. There is a rebate for $25. You have send in the original receipt and a completed form to the manufacturer. there is no guarantee that they will receive the form, process it and send you the check. If they do, it takes from 6-12 weeks to get the check. (My most recent experience was with Brita--a rebate for $4 took 10 weeks!) Many of us are too lazy to go through the trouble of filling out the form and sending it in. Others don't even bother to get the form even though the main reason we purchased the item was because we wanted to make the most of the sale (which in small printed indicated a rebate required).

Finally, at least during the holiday sales, at least its clearance and you buy what you can if its available. But what happens when the item advertised is out of stock and the store either has to give you a rain check (which then begs the question, how many of us actually use it) or offers and item of "equal value" (generally is not!). I call it bait and switch and I am notorious for complaining to the Better Business Bureau about this type of shenanigans.

My point is this: these are tough times. If you absolutely need the item or know you will use it, then more power to you. Make the purchase and put your money to work for you. If you don't need it know, but you know you will use it eventually (i.e. wrapping paper discounted 80%--love it! Christmas cards discounted 75%--love it! Scotch see through tape for gifts discounted 50%--skip it!) My principles applies to foods/perishables, clothing and supplies. Be smart about your money and you will see that it will last longer.