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Black Friday's Bogus Bargains

On the edge of your seat wondering what door-buster deals the big retailers will be pushing over Thanksgiving weekend?

Too late. You should have marked your calendar for mid-October.

That's when rumors started to spread about the big sales major retailers would use to draw crowds on the Friday after Thanksgiving (so-called "Black Friday," to mark the turning point when retailers in the red start to turn a profit). A handful of sites -- like BlackFridayAds.com, bfads.net, and Gottadeal.com -- trumped stores' marketing schedules by posting anticipated deals at holiday hot spots like Wal-Mart, Target, Sears, and Circuit City.

Retailers claim that it's bad for business when the contents of their not-yet-printed sales circulars are leaked to the public before the turkey is even thawed. (Translation: "We don't like our competitors to know our prices before we know theirs and have a chance to make ours look better.")

But let's face it: They've got to be giddy about the free mass-marketing coup. A few subversive websites stealing promotional material from the printing plans isn't going to make or break a merchant's holiday.

The real retail triumph this holiday season isn't spelled out in any ad copy. It's the tricks merchants use to get shoppers to pad their shopping tabs.

On your mark. Get set. Shop!
According to the National Retail Federation, 20% of retail industry sales (more than $400 billion) take place in November and December, with the average consumer, depending on which stats you believe, spending anywhere from $800 to $1,125 to win the affections of their loved ones.

Black Friday is just one interlude in a well-choreographed season-long dance designed to boost business. Even if you manage to eke out the best prices on hot items, you may unwittingly roll your shopping cart into one of these budget-busting traps:

"You snooze, you lose": Like other faux holidays, Black Friday hangs on a flimsy yet effective promotional premise. (See also: "Boss' Day," "International Friendship Day," and "The Simpsons' Love Day") A hard deadline creates a (false) sense of urgency in shoppers. To add to the hype, stores tout extended business hours. This year, more retailers are borrowing a page from Wal-Mart's holiday playbook and opening their doors for business at 5 a.m. on Friday. Not to be outdone, malls across the country are hoping soccer moms will act more like Star Wars and college hoops fans and line up for first dibs at special Midnight Madness promotions, depriving local news crews of any quality family time.

"Quantities are limited, so act fast!": Flea market vendors have a built-in sales tool: scarcity. If something catches your eye, have cash on hand because it might be gone by the time you're back from the ATM. Promoting limited quantities of the hot headlining sale items lets mass marketers play the same game. Last year there were fisticuffs in the aisles of Wal-Mart when the few $398 laptops were quickly sold out. (Rumor has it that a $199 laptop promotion is in the works for this year.) Wal-Mart wasn't too worried about customers leaving empty-handed, though, because half their battle was already won.

"As long as you're here." Sweet deals lure customers into the store; long checkout lines keep them there and help retailers snag a bigger slice of their spending. Even if you manage to resist the impulse items near the cash register (do you really think a windshield de-fogging cloth is a good stocking stuffer?), retailers know you want to make the most of every shopping trip (particularly if you don't have a well-stocked regifting closet). Bargain hunting for batteries and Tickle-me-Whatevers takes a back seat to convenience and cost-cutting when you've already found a parking space and a short-ish checkout line.

"It's our best price ever . as far as you know": How can a store afford to be so generous with its markdowns? By raising the original price to heady levels so that the sale price has added bargain appeal. There are true "loss leaders" -- deeply discounted items with slimmer-than-average profit margins and limited-quantity stock -- and there's everything else. Note the liberal use of the words "sale," "half off," "buy-one-get-one-free," and "50% savings" (typically accompanied by multiple bold-faced exclamation points). Fake bargains mingled with real deals can trip up even the savviest shoppers.

"It's business as usual (with exceptions)": Holiday return/exchange policies become more labyrinthine every season. Restocking fees (particularly on electronics purchases) are commonplace -- Target, Circuit City, and Best Buy charge 15% to return many items. Some stores are instituting tighter deadlines on holiday refunds and exchanges and may only give you credit for an item's post-holiday price. Retailers like Home Depot, Sports Authority, and Barnes & Noble cracking down on frequent shopper-returners by limiting the number of exchanges within a certain period of time. Christmas in July has never sounded better, eh?

Play your holiday cards right
Spending another day cooped up playing board games with the extended fam may sound like a day at the spa compared to fighting traffic and throwing elbows in checkout lines. But if you're determined to face the retail front, arm yourself with a few tools to protect you from any money mind games.

Go shopping before you go shopping: OK, that might sound weird, but the only way to spot the difference between a deal and a dud is by doing some retail reconnaissance work. Familiarize yourself with the pricing history of the items on your gift list. (You did make a list, right?) Many ads leave out an item's original price and simply scream out the sale cost.

Sweat the big stuff: The little things (like cards, wrapping paper, and new underwear to punish the naughty kids on your list) do add up. But you'll drive yourself crazy (and spend a small fortune on gas or shipping charges) trying to get the absolute best price on every item. Target your money saving efforts on the priciest purchases and work your way down the list to smaller-ticket fare.

But read the fine print: Don't expect to get a rundown of return/exchange restrictions from a hurried cashier. And don't assume that a retailer's regular policies apply to holiday purchases. Let your giftees know about any must-meet return deadlines or limits to what they'll get if they want to exchange that GPS for another color.

Avoid "budget creep": Watch the add-ons that add up. Things like extended warranties, rush delivery, and even gift-wrapping can pad the price of an item 5% to 30%. Consider all "extras" independently and ask yourself if you'd pay $[fill in the blank] were you shopping solely for that item.

For more on holiday shopping, see:

Wal-Mart and Home Depot areMotley Fool Inside Valuepicks.

Shopping is Dayana Yochim's cardio, though she plans to take a breather and sleep in on Black Friday. Read more of her money-saving/money-making tips atGreenLight, where her favorite bargain websites appear in the November issue. Take a free 30-day trial for access to the archives, advisor blogs, subscriber discussion boards, and at least $450 worth of tips every month.


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