Millennial Money: What makes a Black Friday deal worth it?

News Talk Florida

2 years ago

Millennial Money: What makes a Black Friday deal worth it?

Black Friday sales are everywhere. Judging by retailers’ advertisements stuffed with language like “must-have deals” and “can’t-miss epic finds,” you’d be led to believe that every deal is too good to pass up.

But what actually makes a Black Friday deal worth pursuing? An item’s reduced price, availability and affordability are key elements.

Here’s what to consider before you buy.

THE ITEM IS SELLING AT THE BEST PRICE

Prices fluctuate throughout the year, making it difficult to recognize whether the deal being offered is actually the best of the best. Most people couldn’t say exactly how much a particular air fryer sold for two weeks ago or two months ago, and whether that differs from the price today.

“Things that you buy every week, you notice the price going up. Where if it’s something you buy maybe once a year or not very often, like a pair of shoes, you don’t know what price is normal or what it was the last time,” says Martin Block , professor emeritus in Medill’s integrated marketing communications program at Northwestern University.

What can you do to become a better judge? Start tracking prices now, says John Boyd , co-founder of ShopSavvy, a price comparison app. Using an app to explore a product’s price history can help you see through retailers’ marketing tactics.

“Sometimes a good sale is really hard to detect because you’re just being bombarded with ‘Oh, we’ve got this great sale and it’s X percent off or Y percent off,’ and there’s no context at all,” Boyd says.

Get familiar with prices in the days leading up to Black Friday, Nov. 25 this year. ShopSavvy and other shopping tools, like PayPal Honey, can also alert you to price drops for specific items and compare prices across retailers so you can find the best deals.

IT’S IN STOCK

Sometimes getting the gift on your list is more important than getting the deepest discount. The 2021 holiday shopping season proved that deals aren’t guaranteed to last: Widespread supply chain snags and surging demand resulted in inventory shortages and shipping delays. Many experts believe supply issues won’t be as prevalent this year. However, popular items could still fly off shelves.

“Certain toys, for example consoles and certain games more than likely, they’ll sell out quickly,” says G. Tony Bell , an assistant professor in the department of supply chain management at Rutgers Business School. “So I would say, definitely buy early. The price advantage in buying later than buying earlier is going to be minimal at best.”

Shopping early could be the right move even if the product you want significantly drops in price after you buy.

“Most stores will let you either return or give you credit if it goes on sale within a certain number of days,” says Debra Radway, a certified financial planner and teaching associate professor at the W.P. Carey School of Business at Arizona State University.

Explore retailers’ return, exchange and price adjustment policies before you shop so you know what to expect.

IT FITS YOUR BUDGET

Most importantly, a Black Friday deal should fit into your budget. A TV that’s in stock and on sale for 99% off still isn’t worth buying if the remaining 1% is out of your price range.

As Bell simply puts it: “Buy what you can afford.”

Bell cautions against taking on new credit for Black Friday purchases — such as credit cards or installment loans known as buy now, pay later plans — because of the potential interest charges or impact on your credit score if you’re unable to repay.

And that’s a real possibility: According to a 2022 Holiday Shopping Report from NerdWallet, 31% of holiday shoppers who used a credit card to buy gifts in 2021 are still carrying debt.

“Putting together a list of who you want to buy for, for the holidays, and setting a budget before you go out shopping will really help to control your spending over the holiday season,” Radway says.

However, bear in mind that it’s OK to skip Black Friday sales altogether. Your loved ones may value something homemade, like cookies or a heartfelt card, as much as a flashy new gift from a store. And you get to save some money. That’s a pretty sweet deal.

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This column was provided to The Associated Press by the personal finance website NerdWallet. Lauren Schwahn is a writer at NerdWallet. Email: lschwahn@nerdwallet.com. Twitter: @lauren_schwahn.