Be Black Friday savvy, warns debt adviser
There are far better discount opportunities throughout the year
In less than two weeks, Black Friday will be here and many already cash-strapped consumers will be hoping their credit cards still have some extended buying power.
“If the card is not bolstered by cash in the bank, leave it in the wallet or purse,” warned Charnel Collins, CEO of National Debt Advisors.
She said if want superseded need, people could get themselves into a precarious debt position by overstretching financially on items they did not need.
Collins said BF (Black Friday), despite all the advertising hype, was not the biggest discount shopping day of the year.
“There are far better discount opportunities throughout the year.
“Many retail outlets often inflate prices before Black Friday to create the illusion that prices have decreased dramatically on the day.”
She also referenced the marketing practice called the “loss leader” approach.
“This involves lowering the prices of a select few items to attract buyers to the store, which often leads to shoppers losing their apparent savings by purchasing other, non-discounted items.”
According to the latest data from consumer credit reporting agency TransUnion, despite overall consumer sentiment indicating a cutback on spend, credit activity has grown since 2020.
This is due mainly to Gen Z and Millennial consumers’ comfortable to take on debt.
Collins cautioned consumers not to allow BF or the festive season to derail them from practising healthy money management tactics. She advised people to create a budget and stick to it.
To avoid falling into the BF advertising marketing spin, price every “need” item a few weeks before BF, and try to sidestep impulse buying.
“However, keep in mind that BF is not only for luxury or non-essential items.
“Be on the lookout for essential items [like food and toiletries] that you can save money on, especially when buying in bulk.”
“Avoid debt at all costs, because high interest rates will wipe out most, if not all of perceived savings.”
Experience shows consumers are likely to spend more during the festive season than at any other time of year.
Collins said for this reason, everyone should have savings in place to cater for this time of year.
“Channel a portion of any year-end bonus you receive towards these savings,” she said.
Finally, people must be honest with themselves. With several price rises in the new year, to simply survive in 2023 will cost more.
January is also “back to school” time, which will add more pressure on wallets.
But a gloomy January might not be the worst consumer problem, cautioned PayPal sales development director for Africa, Mark Mwongela.
“Digital fraud has become a lucrative earner for criminals in the e-commerce and online space, and BF online purchasing is a perfect opportunity.
“For consumers, this means educating themselves and keeping abreast of the latest scams and fraud methods is critical.”
He said every second consumer was probably unaware that they may have been targeted.
“Understanding how scammers operate, what makes a good password, and staying on top of your personal accounts will go a long way in keeping you safe.”
His final caution for online BF buying is to use strong, unique passwords.
“While 92% of people know using a variation of the same password is risky, 65% usually use the same password or variants thereof anyway.”
He said about 80% of data breaches were linked to passwords and 11% of South Africans had been victims of identity theft.
BF was started in the US in 1981. While Amazon (US) was not the founder, it capitalised on the day by offering unbeatable deals on everything needed to survive the winter, which cold consumers embraced.