How
real are the discounts?
During
any festive season discounts are the biggest lure for buyers, but should you
take all offers at face value? Here’s how to spot a real bargain from the
sneaky retail tricks
Even
before the whiff of the festive season arrives, you are inundated with banners
screaming discounts and freebies, each offer more tempting than the other.
Whether you really need the latest gadget or those great shoes, the lure of a
bargain and the money you spend are justified by a seemingly sound
reasoning—“I’m not spending money. I’m saving it because I’ve got what I want
at a cheap rate!”
So, how come after the euphoria has died down, you have a bulging wardrobe, closets overflowing with sundry knick-knacks, bloated bills to pay and an almost empty bank balance?
The truth is that you have given in to the great illusion created by most retailers—you must urgently buy what you fancy because you are getting it at a throwaway price. The reality is that no seller will give you something on a platter by destroying his business. However, when the going is bad, the only way he can entice you to part with your hard-earned money is to make you feel good about what you buy. “When we shop, we get two benefits—utilitarian and emotional. By nature, people are greedy, so discounts are geared more towards appealing to our emotional side than fulfilling any utilitarian value,” says Parag Parikh, chairman, Parag Parikh Financial Advisory Services.
So, before you plunge into the ‘sale’ season, hone your scepticism and know how to spot the real bargain from among the plethora of sneaky tricks that sellers employ to lighten your wallet.
Travel
With the holiday season fast approaching, travel service providers will be gearing up to roll out bargains and hot deals. But on the flip side, it’s easy to get conned into picking a less-thansensible travel deal. Here’s a look at some things to watch out for before booking.
Promotion coupons
These could be standalone deals or come as part of a loyalty programme you’ve signed up for. Check the offer details carefully. You will invariably find that the discount applies only on the base amount. Given that the tax and fee part of the fare/tariff is often as fat, if not fatter, than the base amount, the discount you land will be disappointing, to say the least.
Free shopping and vouchers
Another common hot deal is offering free shopping worth a particular amount on partner sites if you buy something from the travel service provider. Too bad that to bag such discounts you will have to spend a far bigger amount at the respective partners’ sites. For instance, Goibibo.com was promising free shopping worth 5,000 on every flight, hotel or bus booking, but you would have ended up spending over 12,000 at the partnering sites to bag the entire discount. These portals are careful to display the relevant fine print prominently, but there will be an ample number of players who will deliver the whammy to unsuspecting customers after they have parted with the cash.
Cashback schemes
The catch here is that there will be a ‘maximum limit’ somewhere in the details, which will be far lower than the amount you think you’re eligible for by doing the straight math. Another problem is that you will have to spend a minimum amount to be eligible for most such offers. Consider the Cleartrip promotion that claimed ‘Get up to 4,000 instant cashback’. When you delved into the details, you discovered that you got 2,000 back on booking international round-trip flights and another 2,000 only if you booked a two-night stay in an international hotel and the total tariff was over 9,000. So you end up spending at least 25,000 to save 4,000. The biggest red flag is if the offer includes a caveat like ‘hurry’ or ‘offer ends tomorrow’.
Not every special offer or discount that you spot is a con job. Some sales are genuine because sellers need to get rid of unwanted stock or they require to earn money urgently to plough it back into their businesses. Spend a few hours researching on review sites, carefully read the offer details and ask pointed questions. Your real cost is only effort, but the reward is a true bargain.
TRAVEL TRAPS
Your wariness antennae should begin to quiver when you hear these words.
4-star or ‘similar’ hotel
Ask the agent to name all the hotels on his list. He may promise you a good room in a 3-star or 4-star hotel, but then give you a sorry room in a socalled ‘similar’ one.
Free stay
You may have a free room, but what about the taxes and other charges? Will all the meals be free too? Is the hotel easily accessible or will it charge you a bomb to use its transportation?
Additional night free
This sounds tempting but is rarely available when you actually book the hotel. Also, food or taxes will not be free and you may have to pay for sundry charges like pool usage.
Limited offers
These are for a short duration during nonpeak season and you will have to pay extra if you deviate from the dates. Check that the validity lets you hunt for bargain air fares too.
Free pick-up or touristing
Free sightseeing or pick-up is on a seat-in-coach basis, and the seats get filled up fast. Though a guide may be free, you will have to pay the entry charges at the sites you visit.
Spending
Discounts are fast losing their sanctity. They were once the primary vehicle to drive sales during the festive season, but now the distinct line between the discount and nondiscount season has vanished,” says Ankur Bisen, associate vice-president, retail and consumer products, Technopak. However, retailers now face a dilemma. Since customers are always looking for a good bargain, they’ve had to come up with innovative ways to please them, and still make a profit. Here’s how to interpret what you’re told.
Up to 70% discount
What it doesn’t tell you is that the promised discount is only available on select items that are either outdated or unwanted. If you are a regular buyer or had been scouting for a good deal just before sale season started, you can easily spot it. Commenting on a recent story by ET Wealth on ‘5 tips to avoid wasting money’, a reader, Sandeep Nangrani from Delhi, recounted his experience of wanting to buy an item from Big Bazaar for his kid’s room, which was priced at 3,000 in February this year. He postponed his purchase and found the same item on sale six months later. But this time, the original price was mentioned as 10,000, which the store said had been slashed on sale to 3,000.
Sometimes, the company may itself have reduced the price, but most sellers will continue to list the previous one and announce a hearty discount on it. For instance, ezoneonline.com was till recently offering Micromax A100 phone for a discounted price of 9,999 on an MRP of 13,500. However, the company had officially launched the phone on 20 August at 9,999.
Buy two, get one free
This one has many variants—buy one, get one free; buy two, get three free; buy three and get the third at half price; buy items worth 5,000 and get a gift worth 500. Though the offer seems tempting, you end up spending more than you had planned for, and for items that you may not really need. In a lot of cases, you may still not be eligible because you didn’t go through the fine print carefully. For instance, Pepperfry.com was promising to gift you a 1 gm gold coin if you spend more than 14,000. However the T&C clearly states that the offer is valid just for three days and for the first 500 customers only. So, you may spend a sizeable amount without getting anything in return.
You may often get a clearer picture only once you’re ready to pay the final bill. Here’s where retailers leverage behavioural economics to persuade you to buy. Since you’ve already spent ample time hunting for bargains, you won’t want to waste that effort. Plus, there is a sense of embarrassment if you have to leave all the items. What you should do is stick to what you actually want and ask the salesperson whether you could get even a 10% discount on the single item. Most stores don’t advertise this openly.
Convert into EMIs
While credit cards and loans have been offering this facility, most stores have also started providing it. They could even be offering 0% finance. What they aren’t telling you is that though you won’t be charged any interest, you will still have to make a sizeable down payment, as well as pay a processing fee. For instance, to convert a purchase of 20,000 into six months’ EMI, you will have to pay about 8,000 upfront and the processing fee will be 650-900. The longer the tenure or the bigger the amount, the higher the fee. The scheme is bound to tempt you to buy something you can’t currently afford, but you need to be sure if you can continue to pay for it in the long run. What if there’s an emergency and you miss a payment? You will then have to belt out a very high penalty. Another catch with such schemes is that the seller will be willing to offer it only on the MRP, not on the discounted price.
50,000 off on a new car worth 3 lakh
Nowhere are discounts more aggressive and enticing than in the automobile segment. Never be tempted by the big figure as it probably contains lots of bonuses, such as exchange bonus, corporate discount and loyalty bonus. You will probably not be eligible for most of these and, even if you are, the dealer will try to cover it up in other areas. Most corporate discounts are hardly significant and are the same across all car dealers. Where you do need to be careful is the exchange bonus. You should contact a few independent second-hand dealers to find out the true sale value of your car before being tempted by an illusionary bonus. Instead of free accessories, which will never cost as much as the dealer claims them to be, focus on the real discount.
Flash sales, auctions & bidding
As the online market expands, so do the methods to tempt customers. Flash sales and limited offers cash in on the urgency factor. They last for a day or two, or a week, at the maximum. The seller will press you into believing that the deal is available exclusively to you and for a very short period of time, but a bit of research will prove its fallacy. For instance, eBay.in was offering an HTC Fiesta, where HTC phones were available at up to 70% discount only till stocks lasted. So, the MRP of the HTC Desire C was touted to be 19,990, and the phone was available on sale for 12,999. If, however, you use the ‘limited period’ discount voucher, you could buy the phone for only 11,699. The same phone is available on Junglee.com for 11,799.
While opting for such deals, you must ignore the ticking clock. A lot of flash sales offer only a handful of deals at a time, and they need to constantly bring out new deals every week. There’s no guarantee that their inventory will be sold, which is why the old deals get repeated after some time. “There is so much choice available to buyers now that the only limit is the time they can expend on research,” says Bisen.
NAMRATA DADWAL With Sushmita Choudhury Agarwal TOI120917
So, how come after the euphoria has died down, you have a bulging wardrobe, closets overflowing with sundry knick-knacks, bloated bills to pay and an almost empty bank balance?
The truth is that you have given in to the great illusion created by most retailers—you must urgently buy what you fancy because you are getting it at a throwaway price. The reality is that no seller will give you something on a platter by destroying his business. However, when the going is bad, the only way he can entice you to part with your hard-earned money is to make you feel good about what you buy. “When we shop, we get two benefits—utilitarian and emotional. By nature, people are greedy, so discounts are geared more towards appealing to our emotional side than fulfilling any utilitarian value,” says Parag Parikh, chairman, Parag Parikh Financial Advisory Services.
So, before you plunge into the ‘sale’ season, hone your scepticism and know how to spot the real bargain from among the plethora of sneaky tricks that sellers employ to lighten your wallet.
Travel
With the holiday season fast approaching, travel service providers will be gearing up to roll out bargains and hot deals. But on the flip side, it’s easy to get conned into picking a less-thansensible travel deal. Here’s a look at some things to watch out for before booking.
Promotion coupons
These could be standalone deals or come as part of a loyalty programme you’ve signed up for. Check the offer details carefully. You will invariably find that the discount applies only on the base amount. Given that the tax and fee part of the fare/tariff is often as fat, if not fatter, than the base amount, the discount you land will be disappointing, to say the least.
Free shopping and vouchers
Another common hot deal is offering free shopping worth a particular amount on partner sites if you buy something from the travel service provider. Too bad that to bag such discounts you will have to spend a far bigger amount at the respective partners’ sites. For instance, Goibibo.com was promising free shopping worth 5,000 on every flight, hotel or bus booking, but you would have ended up spending over 12,000 at the partnering sites to bag the entire discount. These portals are careful to display the relevant fine print prominently, but there will be an ample number of players who will deliver the whammy to unsuspecting customers after they have parted with the cash.
Cashback schemes
The catch here is that there will be a ‘maximum limit’ somewhere in the details, which will be far lower than the amount you think you’re eligible for by doing the straight math. Another problem is that you will have to spend a minimum amount to be eligible for most such offers. Consider the Cleartrip promotion that claimed ‘Get up to 4,000 instant cashback’. When you delved into the details, you discovered that you got 2,000 back on booking international round-trip flights and another 2,000 only if you booked a two-night stay in an international hotel and the total tariff was over 9,000. So you end up spending at least 25,000 to save 4,000. The biggest red flag is if the offer includes a caveat like ‘hurry’ or ‘offer ends tomorrow’.
Not every special offer or discount that you spot is a con job. Some sales are genuine because sellers need to get rid of unwanted stock or they require to earn money urgently to plough it back into their businesses. Spend a few hours researching on review sites, carefully read the offer details and ask pointed questions. Your real cost is only effort, but the reward is a true bargain.
TRAVEL TRAPS
Your wariness antennae should begin to quiver when you hear these words.
4-star or ‘similar’ hotel
Ask the agent to name all the hotels on his list. He may promise you a good room in a 3-star or 4-star hotel, but then give you a sorry room in a socalled ‘similar’ one.
Free stay
You may have a free room, but what about the taxes and other charges? Will all the meals be free too? Is the hotel easily accessible or will it charge you a bomb to use its transportation?
Additional night free
This sounds tempting but is rarely available when you actually book the hotel. Also, food or taxes will not be free and you may have to pay for sundry charges like pool usage.
Limited offers
These are for a short duration during nonpeak season and you will have to pay extra if you deviate from the dates. Check that the validity lets you hunt for bargain air fares too.
Free pick-up or touristing
Free sightseeing or pick-up is on a seat-in-coach basis, and the seats get filled up fast. Though a guide may be free, you will have to pay the entry charges at the sites you visit.
Spending
Discounts are fast losing their sanctity. They were once the primary vehicle to drive sales during the festive season, but now the distinct line between the discount and nondiscount season has vanished,” says Ankur Bisen, associate vice-president, retail and consumer products, Technopak. However, retailers now face a dilemma. Since customers are always looking for a good bargain, they’ve had to come up with innovative ways to please them, and still make a profit. Here’s how to interpret what you’re told.
Up to 70% discount
What it doesn’t tell you is that the promised discount is only available on select items that are either outdated or unwanted. If you are a regular buyer or had been scouting for a good deal just before sale season started, you can easily spot it. Commenting on a recent story by ET Wealth on ‘5 tips to avoid wasting money’, a reader, Sandeep Nangrani from Delhi, recounted his experience of wanting to buy an item from Big Bazaar for his kid’s room, which was priced at 3,000 in February this year. He postponed his purchase and found the same item on sale six months later. But this time, the original price was mentioned as 10,000, which the store said had been slashed on sale to 3,000.
Sometimes, the company may itself have reduced the price, but most sellers will continue to list the previous one and announce a hearty discount on it. For instance, ezoneonline.com was till recently offering Micromax A100 phone for a discounted price of 9,999 on an MRP of 13,500. However, the company had officially launched the phone on 20 August at 9,999.
Buy two, get one free
This one has many variants—buy one, get one free; buy two, get three free; buy three and get the third at half price; buy items worth 5,000 and get a gift worth 500. Though the offer seems tempting, you end up spending more than you had planned for, and for items that you may not really need. In a lot of cases, you may still not be eligible because you didn’t go through the fine print carefully. For instance, Pepperfry.com was promising to gift you a 1 gm gold coin if you spend more than 14,000. However the T&C clearly states that the offer is valid just for three days and for the first 500 customers only. So, you may spend a sizeable amount without getting anything in return.
You may often get a clearer picture only once you’re ready to pay the final bill. Here’s where retailers leverage behavioural economics to persuade you to buy. Since you’ve already spent ample time hunting for bargains, you won’t want to waste that effort. Plus, there is a sense of embarrassment if you have to leave all the items. What you should do is stick to what you actually want and ask the salesperson whether you could get even a 10% discount on the single item. Most stores don’t advertise this openly.
Convert into EMIs
While credit cards and loans have been offering this facility, most stores have also started providing it. They could even be offering 0% finance. What they aren’t telling you is that though you won’t be charged any interest, you will still have to make a sizeable down payment, as well as pay a processing fee. For instance, to convert a purchase of 20,000 into six months’ EMI, you will have to pay about 8,000 upfront and the processing fee will be 650-900. The longer the tenure or the bigger the amount, the higher the fee. The scheme is bound to tempt you to buy something you can’t currently afford, but you need to be sure if you can continue to pay for it in the long run. What if there’s an emergency and you miss a payment? You will then have to belt out a very high penalty. Another catch with such schemes is that the seller will be willing to offer it only on the MRP, not on the discounted price.
50,000 off on a new car worth 3 lakh
Nowhere are discounts more aggressive and enticing than in the automobile segment. Never be tempted by the big figure as it probably contains lots of bonuses, such as exchange bonus, corporate discount and loyalty bonus. You will probably not be eligible for most of these and, even if you are, the dealer will try to cover it up in other areas. Most corporate discounts are hardly significant and are the same across all car dealers. Where you do need to be careful is the exchange bonus. You should contact a few independent second-hand dealers to find out the true sale value of your car before being tempted by an illusionary bonus. Instead of free accessories, which will never cost as much as the dealer claims them to be, focus on the real discount.
Flash sales, auctions & bidding
As the online market expands, so do the methods to tempt customers. Flash sales and limited offers cash in on the urgency factor. They last for a day or two, or a week, at the maximum. The seller will press you into believing that the deal is available exclusively to you and for a very short period of time, but a bit of research will prove its fallacy. For instance, eBay.in was offering an HTC Fiesta, where HTC phones were available at up to 70% discount only till stocks lasted. So, the MRP of the HTC Desire C was touted to be 19,990, and the phone was available on sale for 12,999. If, however, you use the ‘limited period’ discount voucher, you could buy the phone for only 11,699. The same phone is available on Junglee.com for 11,799.
While opting for such deals, you must ignore the ticking clock. A lot of flash sales offer only a handful of deals at a time, and they need to constantly bring out new deals every week. There’s no guarantee that their inventory will be sold, which is why the old deals get repeated after some time. “There is so much choice available to buyers now that the only limit is the time they can expend on research,” says Bisen.
NAMRATA DADWAL With Sushmita Choudhury Agarwal TOI120917
