Black Friday: Bargaining on consumer ignorance

If you don’t know what things normally cost you won’t be able to tell if you are getting a bargain on Black Friday, says Chris Eddy, Head of Investments at 10X Investments.

While many products appear to be massively discounted on Black Friday, unsuspecting shoppers may just be falling for retailers’ cunning tactics.

One tactic that retailers have been accused of is to slowly increase their prices in the weeks leading up to sales days, such as Black Friday. When they cut prices on the day the double-digit discounts look huge.

Another is to show the discount off the Recommended Retail Price, which is often higher than they would usually charge for the product. This psychological manipulation is commonplace, with many shoppers acting on impulse when they believe that they are scoring a great deal.

The reality is that a Black Friday deal often really isn’t that great.

To ensure they don’t get ripped off, bargain hunters should do some thorough research. They should know what an item’s regular price is and preferably compare similar products across more than one shop. That way they will get a sense of how big any discount is.

I have strong feelings about this because we see people making a similar mistake – getting taken advantage of because they don’t do their research or understand what things cost – with their investments all the time. Granted, this is a lot more damaging to people’s finances than a crazy spending spree on Black Friday, but the principle is the same. Investors will pay over many thousands of rand more than they need to over the years because they don’t do their research to see how much their investments actually cost.

The best way to protect against being ripped off on Black Friday is to do some homework before hitting the mall. Make a list of a few things you would really like or need and do some research about their cost. That will help you recognise a good deal.

As for your long-term investments, 10X Investments will take the pain out of the research and price-checking by doing a cost comparison for you. Give 10X a copy of a recent investment statement, and one of the company’s retirement experts will look at what you are paying and do a comparison with a similar 10X product. Additionally, they will calculate what this difference would mean over time. Find out more here.

It is important to do your homework so that you are not ripped off this Black Friday, as well as for the rest of your life with your investments.

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