Thursday, October 28, 2010

Separating you from your cash

Well, it's almost Halloween which can only mean one thing: It's going to be BLACK FRIDAY SOON!

Before you fall prey to the steady stream of news reports showing people lining up for hours in the freezing cold to buy some ZXIANG PANG 42" LCD for $399 consider these "Black Friday MYTHS" exposed by Dealnews.com

MYTH: The deals are so good on Black Friday, they're worth sleeping overnight on a curb for, right? Italic

Nope, most of the "deals" will be met or beaten by prices later during the holiday season. For any consumer product prices are going to be falling for the foreseeable future. Anything made out of cotton however, is likely to get meaningfully more expensive as Cotton has hit a 145 year high recently (but remember there is no inflation). Also, in their Black Friday ads, retailers often mix in their everyday prices with their steeper discounts, hoping that a shopper will bite on a high-profit item.


MYTH: Black Friday is the busiest shopping day of the year. The Saturday before December 25 is actually the busiest shopping day of the year.

MYTH: Black Friday prices are always sale prices. Not only are some deals matched later on, some prices were better before Black Friday. In the past several years, retailers have been caught red-handed jacking up prices before Black Friday, then lowering them with supposed discounts that leave the price higher than it was before.

This is very prevalent in many of the large department stores. They'll take an item that's $80 and jack the price to $120 and then offer a 30% discount (down to $84) on Black Friday. You think you're getting a deal and you just got taken for an extra $4 and robbed of 3 hours of sleep.

MYTH: Leaked Black Friday ads are accurate. In fact, they are often inaccurate. See last year's leaked OfficeMax flyer. It was 100% inaccurate. This year has already had its first failure, as two conflicting Harbor Freight ads have been released (hopefully one of those is right).

MYTH: Black Friday is the best day to buy a new TV. For the last three years, the best time to buy a good TV wasn't on Black Friday; it was either in December (2007 & 2008) or January (2009). The rule is that Black Friday is the best time of the year to buy no-name TVs, and the weeks following are the best time to buy high-end TVs.

I'd actually disagree with Dealnews a bit here. Yes, the best time to buy a name brand (Sony, Samsung, Toshiba) TV with a traditional sales price might be December however, stores always overstock TVs heading into Christmas and the Superbowl. If you can wait them out, you'll see massive clearances of the existing stock of TVs in June-September because stores will be building inventory of new TV's heading into the holidays. I waited about 14 years between TV purchases and when I finally broke down this summer it was for a TV that was priced at 25% of it's current online price.

The best advice is to assume that every Black Friday ad is trying to separate you from your hard earned cash and you'll look at them with a more critical eye. This should not be your mantra : when they say jump, you say how high? (Bonus points if you can id the RATM song with that quote).

Cheers!

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The highlight of the President's interview with John Stewart last night had to be this little exchange:

President Obama: "In fairness, Larry (Summers) did a heck of a job"
Stewart: "You don't want to use that phrase, dude."

I'm not entirely sure the President understood why it was so funny (remember "Heckuva job Brownie" from Katrina?), but he did follow it up with "pun intended" so it felt like he was in on the joke.

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