Why Do I Spend So Much When Shopping Online?

Man opening a package from an online retailerQ: I’m really trying to stick to a budget this holiday season, and I’m doing most of my shopping online. It should be easy to stay on track, so why am I constantly going over budget?

A: Both online and in-store shopping can tempt you to overspend, but the internet is particularly designed to help you lose track of your dollars.

More and more people are choosing to hit the web instead of the mall for holiday shopping. The internet definitely wins for convenience. Since there are no crowded malls, no long lines and no crabby cashiers, it’s much more enjoyable. Plus, you get to shop in your PJs. Can it get better than that?

Shopping the old-fashioned way, though, is not without merit. When purchasing items that need to fit right or that you may need immediately, you might want to head to the mall or local small business. You might even save money that way.

If you choose to do most of your holiday shopping on the internet, though, it’s good to understand why we tend to overspend online.

Why we spend more online
Here are 10 ways online retailers push us to overspend:

1. They push products strategically.
The first few products you’ll see when you visit a retail website aren’t necessarily the hottest-selling items; they’re just the stuff the company needs to get rid of most urgently. Most people, though, will assume the products on the site’s homepage are the most popular and will quickly drop one or two of these items into their cart.

2. They offer free shipping—with a minimum purchase.
Don’t think the retailer is being super-generous when they offer to sponsor the shipping costs if you spend $50 or more. They’re only luring you to spend more. And it works: Most people choose to fill their carts with stuff they don’t need just to avoid paying the shipping fee.

3. They make it super-easy to check out.
Websites make their checkout process ridiculously easy just to keep you buying. If your info’s been saved on the site, you can order your whole cart within minutes. The quicker you make those purchases, the less time you have to rethink them and opt out.

4. They offer spending-based discounts.
Online retailers often offer discounts after you’ve reached a certain spending threshold. Just like the free-shipping minimum, these conditional discounts manipulate you into spending more just to qualify—even if you won’t save any money at the end of the day.

5. They change their prices without rhyme or reason.
Online retailers constantly adjust their prices according to consumer and market behavior. This tactic, known as “dynamic pricing,” is designed to draw you back to the site again and again just to check the going price. It also prompts you to buy before the price rises again.

6. They use anchor pricing.
Retailers want you to believe you’re getting a great deal. They frequently employ “anchor pricing,” or placing items with inflated price tags right next to one you’re looking at now to make your desired item look less costly.

7. Their ads stalk you.
Online retailers target you with ads based on your search history. They know what you’re into and they can even determine your style.

8. They have lenient return policies.
Online retailers purposely have looser return policies than their brick-and-mortar counterparts. They know you’ll consider these policies when making your purchase and that you’re more likely to buy something online if you can easily send it back to the store.

9. They have a virtual checkout aisle.
If you think you’ll save big by shopping online because you won’t be tempted to grab all those goodies that the brick-and-mortar stores have lining their checkout aisles, here’s a reality check: Retailers are smarter than that. They’ve discovered a way to create a virtual checkout aisle, full of last minute add-ons that go well with the stuff you’re buying. It’s all designed to make you drop another item or two into your cart before you realize your total is way above your planned budget.

10. They stay in touch.
That subtle email reminder that you still have items in your cart is really just a nice way of nudging you back into. buying mode. Fact is, it works. When retailers send you emails with headlines that scream about “Today Only!” and “Free Shipping on Every Order,” they get your attention. And your money, too.

Spending less online
Should you ditch the on-the-couch shopping and camp out at the mall until the holidays?

You don’t need to be extreme and do all your shopping IRL this year. By educating yourself about the most common manipulative tactics that online retailers use, you’re already better equipped at handling them. You can also follow these tips to keep your online spending to a minimum:

1. Shop with a list
Yes, just like the one you scribble before heading to the grocery. Don’t just have a look around your favorite sites. Decide what you want and need to purchase before browsing, and do your best to stick to your list.

2. Set a time limit.
When there are no store closing hours to curtail your shopping trip, you can easily lose track of the time, which can trigger overspending. Plus, the internet is designed to keep you engaged, and one click leads to another. Give yourself a reasonable amount of time to shop, and once time’s up, snap your laptop shut.

3. Never pay full price.
Don’t check out without doing a quick search for coupons and discounts on sites like RetailMeNot.com and CouponCabin.com.

4. Don’t twist yourself into a pretzel to qualify for free shipping.
Don’t buy stuff you don’t need just to avoid a dreaded shipping fee.

5. Shop early.
You’ll find it easier to stick to your budget, and to avoid the free shipping trap, when you shop early. Plus, many e-tailers offer free shipping with no strings attached as long as you don’t mind waiting a bit for your stuff to show up.

With awareness and careful planning, you can stick to your budget this holiday season—even when shopping online.

Your Turn:
Do you spend more when shopping online or in-store? Tell us all about it in the comments below.

SOURCES:

https://www.google.com/amp/s/www.cnbc.com/amp/2017/05/18/you-might-be-spending-twice-as-much-money-as-you-think-online-shopping.html

https://www.google.com/amp/s/www.recode.net/platform/amp/2018/6/8/17441288/internet-time-spent-tv-zenith-data-media

https://apparelmag.com/holiday-trend-continues-consumers-will-do-more-shopping-online-vs-store-season

https://www.everydollar.com/blog/online-vs-in-store-shopping

https://www.google.com/amp/s/kdvr.com/2017/12/04/do-you-spend-more-when-shopping-online/amp/

https://www.google.com/amp/s/amp.businessinsider.com/sneaky-ways-online-retailers-get-you-to-spend-more-2016-5

5 Scams To Avoid This Black Friday

Woman at home views tablet showing black friday sale adBlack Friday and Cyber Monday can be great fun – but they can also put you at great risk. Scams abound on the weekend that heralds the holiday shopping season, and you don’t want a phishing scheme or a bogus bargain to turn you into a Grinch.

Here are five scams to look out for as you brave the frenzied crowds while trying to snag the best deals after Thanksgiving.

1. Crazy deals that are actually bogus
The noisy crowds and flashy ads on Black Friday can lead you to make rash decisions and spend more than you planned. But be careful not to leave your senses at home.

An iPhone X retailing at just $12? A pair of genuine Ugg boots for just $9? These deals sound insane because that’s exactly what they are. And yet, thousands of people happily send their money to online stores that are advertising these laughable prices on Black Friday. And of course, once the scammers have your credit card information, they won’t hesitate to use it for their own shopping spree – all on your dime.

Be smarter: Don’t believe any advertised price that is ridiculously low. It’s only bait used by scammers to lure you into their trap. Black Friday deals tend to fall within the 20-30% off range or an offer of free shipping.

2. Black Friday gift cards for cheap
In the weeks leading up to Black Friday, you might see an explosion of cheap gift cards being sold at online marketplaces. The gift cards are linked to big-name retailers and are offered for a fraction of their real value.

These cards are usually stolen from their real owners. The victim of the theft will likely report the loss and the card will be disabled. And you’ll have forked over your hard-earned money for a card that’s not worth the plastic it’s made from.

Be smarter: Don’t buy any gift cards that are retailing at a heavily marked-down price.

3. Bait and switch
Want to be the lucky winner of a brand new iPhone X? Just fill out a form with your personal details and take this survey. You may just be the proud new owner of the super-expensive phone!

If you know anything about online scams, you’ll already recognize this one. Your personal details and a site whose authenticity you can’t verify are two things that should never meet. The sweepstakes is just the scammer’s bait to get at your information. And, with holiday expenses growing each year, it’s the perfect time to lure an innocent victim into thinking they’ve just saved a ton of money.

Don’t make the mistake of thinking you’re safe from this scam just because you’re doing all your Black Friday shopping at the mall. “Bait and switch” scams can happen offline, too.

The brick-and-mortar version of this scam is somewhat less nefarious. Retailers will advertise deals so amazing you’ll find yourself travelling across town and battling impossible traffic to grab these bargains. Once you finally reach the store, though, you’ll be told that those items are all sold out, but you can check out the items they do have in stock. You’ll be shown similar, but inferior, products and cheap knockoffs, or nothing you’re interested in at all. These scams are just a waste of your time and often your money, too.

Be smarter: Don’t enter any sweepstakes or believe advertisements for heavily marked-down prices on sites and stores you’re unfamiliar with.

4. Delivery problems
With so much of your shopping happening online, you probably wouldn’t be surprised to receive an email claiming there’s been a problem with the delivery of one of your purchases. But if you get an email like this asking you to click on a link or download an attachment to arrange an alternative delivery date, you’re looking at a scam. You may also receive a message asking you to pay an extra fee for delivery after you’ve completed an order. Again, this email is bogus and you’re being scammed. Ignore these emails. And, if you have a problem with the delivery of your purchase, contact the seller or company directly.

Be smarter: Never download anything or click on a link from an unverifiable source.

5. Online purchases that can only be paid for with a wire transfer
If you’re planning on going on an all-out spending spree this Black Friday, use your credit card. It offers you the most protection against purchases that don’t turn out to be what you expected.

A debit card can be a good choice, too, if you’re only shopping at stores and retailers you trust and frequent often.

Never agree to an online purchase demanding payment via money order or wire transfer. These are favorites among scammers since they are similar to paying with cash – once the money has changed hands, there’s almost no way you can get it back.

Be smarter: When frequenting unfamiliar stores and sites, use your credit card.

Be an educated shopper this Black Friday and outsmart scammers!

Your Turn:
Have you ever been targeted by a Black Friday scam? Share your experience with us in the comments below.

SOURCES:
https://www.finder.com/black-friday-scams

https://www.makeuseof.com/tag/6-scams-watch-black-friday-cyber-monday/

Shopping In Store vs. Online

Deciding between taking a ride or going online
Are you the kind ofOnline Shopping person who enjoys perusing store by store at the mall in the hopes of finding what you need? Or do you prefer to sit at your computer or tablet in the comfort of your own home, filling virtual shopping carts with items?

The truth is, there’s no right or wrong; it’s purely whatever floats your boat. However, there are certain items that you may be better off purchasing from a good old brick-and-mortar store, and ones that you may benefit from buying online. Next time you’re in the market for one of these items, you may want to consider the venue in which you buy them.

Books – Best to buy: Online
Why: Independent bookstores such as Barnes & Noble or local booksellers sell most of their products at full retail price. But at e-commerce stores such as Amazon or Half.com, you can typically save a staggering 30 to 50 percent. Plus, when you’re ordering a book, you know exactly what you’re getting (whereas with something such as clothing, it could look different in the picture). You can buy a book online anytime you’d like, new or used, and most of the time, sellers will offer free shipping or shipping at a minimal fee, (which is usually still less than what you’d pay at a retail bookseller).

TVs – Best to buy: Online
Why: More often than not, online prices will be lower than in store (unless the store is one to match the online price, which is becoming more common). And while stores typically have a range of TVs where you can evaluate its pictures, you can also use Consumer Reports TV Ratings to get an accurate picture quality assessment. Additionally, many retailers often set their TVs to a retail or store mode, which heightens brightness and color in a way that looks perfect under fluorescent lights. Do some research before you buy, and that way, the right TV for you can be delivered directly to your door.

Party supplies – Best to buy: Online
Why: When buying décor for a birthday party, bridal shower or other celebration, you’re likely looking for products that fit a specific theme, and that can be hard to come by or take up a lot of time when searching by walking the aisles in stores. When you shop online for party supplies on sites like Amazon or eBay, or retailers such as Oriental Trading or Party City, you can easily sort through the products and find exactly what you’re looking for. Another plus: Many online stores that specialize in party supplies offer promotions, discounted items and even free shipping offers on select orders.

Clothing – Best to buy: In store
Why: Ever bought a shirt or pair of pants online, happily opened the box when it arrived at your home, only to be disappointed in the look and fit? Buying clothing online is risky; you never know fully if the sample picture is off or if sizes vary store by store. Plus, even when you return clothing after buying online, you typically won’t be refunded the shipping costs, and some retailers’ return policies may not be ideal.

Cell phones – Best to buy: In store
Why: Despite how many reviews you read about phones, you won’t get a true depiction until you hold it in your hands. Everyone’s different, and the features on a phone are important to one person may not be as necessary for another.

Food, beer, wine – Best to buy: In store
Why: While online food and beverage shopping may seem like a time saver, in the end it can actually cost you more money than going to a traditional grocery store. Many products sold at online stores can be marked up to prices similar to those of a convenience store. And, many online retailers don’t take coupons, which limits your ability to save in that respect. It’s also rare for an online store to practice price matching, which is a practice many stores are executing now. And don’t forget about shipping costs — a price you won’t have to incur at a supermarket.

There’s always a bargain if you do the research, so take your time and you’ll be on your way to extra savings in no time.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.