10 sneaky retail tricks that are debt traps - part 2

by StepChange Debt Charity on 28 April 2011  |  0 comments
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The second and final part of our series on sneaky retail tricks that encourage you to spend more.

Continuing on from our blog post last week, we’re looking at the top ten retail tricks that can often leave you with a debt hangover, especially if you’re looking at ‘big ticket’ items.

So in reverse order, here are the remaining five…

5. Instant replacement cover

This is usually offered on lower-priced items like shavers, kettles and microwaves. It seems cheap enough, so why not?

This is another way to make you spend more than you need to - even on less expensive items. Also, you need to keep hold of your receipt for years because if your kettle does break, the retailer won’t change it without proof of your policy.

Small insurances might seem to make sense at the time, but remember an impulse purchase is not one you want to be making when you’re on a strict budget.

4. The price promise

“We’ll match any price and refund you the difference!” The small print also reads: the goods have to be in stock at another retail store within ten miles.  The emphasis being ‘in stock’ because all the big ticket retailers play a game with customers, advertising something they don’t actually have in stock.

So you spend all day driving around different retail stores based on a newspaper advertisement of a special price promotion to find that the goods aren’t in stock. You end up buying a different vacuum at the usual store sticker price at the only place that has it in stock.

Clever sales gimmicks and false advertising can cause you to spend more than planned. Stick to the amount you had in mind, even if it means you sometimes have to go home empty handed.

3. Delivery

It’s a fact that all of the big ticket retail outlets would still be in business even if they didn’t charge for delivery.

In essence, to them, the delivery charge is pure profit and as such they want to get the most out of it.

Everybody hates waiting in all day for a delivery that could come at anytime, but are you willing to pay the premium delivery charge for an AM or PM delivery?

In some stores, being specific about morning or afternoon delivery can cost up to £10 on top of the normal delivery charge. Just another way to get you to spend more than you originally planned.

Always factor in delivery costs - for some items this can be very expensive. Do your research before you buy.

2. The humble store card

Store cards with high interest rates are the worst way to shop. However, they’re sometimes cleverly sold with up to 56 days’ interest-free credit. This is based on the fact that if you get approved, the store can put your purchase on the card today and you won’t get a statement to pay for six weeks.

Beware of this; when you receive your statement, it can be tempting not to pay your bill in full. Don’t fall into this debt trap.

1. Buy Now, Pay Later

10% deposit and the usual credit check. No payments for six months. You pay the balance in full at the end of the interest-free period and you won’t get charged any interest.

And of course, the credit company will write to you at the end of the interest-free period to remind you to pay up. Or will they?

Most will, but you’ll find in the small print that they’re not legally bound to, and if you don’t get a letter to remind you and you forget to pay the balance by a day or two, the credit company will add interest from the day of purchase, and they won’t back down. The interest will be charged at an extortionate rate.

This is the ‘Big Daddy’ of retail debt traps; it could essentially cost you thousands of pounds in interest.

Ask yourself, is the item essential? Can I save up for it instead? If I am going to take credit, can I afford the repayments? Have I read all the terms of the agreement? Have I shopped around for better interest rates?

As we said last week, we all like to go shopping. The important thing is to stick to spending amounts that you can afford and that you have accurately budgeted for.

Then next time you’re shopping for a big ticket retail item you might want to take this list with you, along with a written amount of how much you are willing to spend.

Hopefully by following our advice you can keep clear of retail debt traps but if you’re struggling with credit debts already, take some free and impartial advice from CCCS by using our online debt advice tool.