Financial Planning

Will you really be saving money on Black Friday?

Interest rates, laybys, and navigating the distractions – here’s everything you need for the biggest shopping day of the year, with a little help from Farzana Botha, Manager: Segment Solutions, Retail Affluent: Recurring Savings.

Black Friday is a major highlight on countless people’s calendars – and for good reason: it signals the start of the festive season and holidays to come, and it’s the one time of the year when just about everything seems to be on sale. Clothes, perfume, tech, food, flight tickets – you name it. But as the old saying goes, not all that glitters is gold. With the recent hike in the interest rate, along with fierce marketing tactics from retailers, these deals might not be all they’re cut out to be. Here are five things to remember before you splurge on this November.

Research and compare prices

1. Determine wants vs. needs

It’s always nice to get something you really need or have wanted for a while on sale, says Farzana. “A sale gives you better value on an item so it makes sense to delay a purchase until an item is reasonably discounted and it is within your budget to get it.” She suggests, however, that it is important to be aware of whether an item is really discounted or if the base price was inflated before the discount was applied, which requires some homework and planning. “If you’re keen to buy a new TV, monitor the average price of that item and look around online and in-store to compare prices at various retailers. You have a benchmark price for the item so that you can budget for it and if it goes on sale, you will know just how much you are saving – if anything. You need to plan and budget for these sale items to avoid overspending and avoid being tricked into a ‘false sale’ resulting in purchases you didn’t need or have the budget for.”

Sure – it’s important psychologically to be able to buy things you want every now and then, says Farzana. “It allows you to feel a sense of accomplishment and freedom. But even with these wants, it’s important to plan and save for these things so you can enjoy your purchase without the long-term consequence of having to pay off the interest that might be incurred if you bought the item on credit. True freedom is being debt-free, and being financially free means managing debt.” Farzana recommends that you always find the balance between enjoying luxuries without creating new debt.

Look out for good deals

2. Be cautious of interest rates

Any loan or credit used to purchase an item means you’ll be paying interest on that amount until the loan is paid off in full, says Farzana. “If I buy an item for R1 000 on sale, but I buy it on credit, it will cost me R1 000 plus all the interest I will pay over the term of the loan or credit. Which could even amount to being up to double the price.”

“If I choose layby on an item I want that isn’t on sale, but costs R1 100 at the time. I will pay interest-free instalments to the amount of R1 100 and have the item once that amount is paid. This is a better option than buying the item on sale using a credit card or loan,” she says. If you’re fortunate, Farzana adds, you’ll find an item on sale, and the retailer might allow you to buy on layby anyway. “Always keep a look out for good deals,” she points out.

3. Don’t be duped

Many retailers try to get rid of unwanted stock while pushing brands that have not performed well during the year. Similarly, when it comes to tech, crazy deals might be an indication that newer and improved models are about to be released. The best bet is to do thorough research on everything you plan on buying to ensure that you’re investing in high-quality items that will last you for more than one season.

Bonus tip: be sure to examine return policies, as these can be quite tricky when it comes to Black Friday specials. And be sure to retain all receipts and proof of payments.

4. Choose when, and how, to shop

Many retailers hype up the idea that the best deals are found in-store. This isn’t always true, though. Many major deals are likely to be found online too, so you can choose when and how you shop. Keep this in mind, as this year will likely be one of the busiest Black Friday seasons ever, thanks to the worst of the pandemic finally being behind us.

Bonus tip: shopping online also gives you the opportunity to save items in your cart before checking out. This way you can really think about each purchase, and have the opportunity to compare prices with other retailers.

5. Don’t be distracted

Often coined as the ‘halo effect’, some retailers offer one or two truly exceptional deals to create the impression that all other deals on offer are equally good, coaxing customers to shop more items, and across channels. Don’t be fooled though: some deals aren’t necessarily worth it. Additionally, many of these so-called ‘limited’ deals are actually often also available during other sales throughout the year, and the idea of scarcity is planted to instil the fear of missing out.

Bonus tip: “Black Friday offers some good deals,” says Farzana, “but a lot of the deals that are presented to us, could be found elsewhere during other periods of the year if you search and compare prices. Do your homework so you don’t fall prey to sale periods.”

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