Should You Heed Dave Ramsey's Warning About These Retailer Tricks During the Holiday Season?

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KEY POINTS

  • Dave Ramsey warned about some common tricks retailers use to prompt you to spend more during the holidays.
  • You can avoid falling into this trap by being aware of them in advance.
  • Watch out for psychological tricks like colors and smells that compel shoppers to buy more.

Don't end up overspending because of retailer tricks.

If you're like most people, chances are you're going to be headed out to do some holiday shopping. Unfortunately, when you're walking around stores and retail establishments, you're at risk of spending more than expected on your credit cards.

That's because retailers have a number of tricks they implement to try to convince you to bust your budget and buy more than you need. The good news is, you can avoid falling victim to these traps if you're smart about your shopping.

To help you out, finance expert Dave Ramsey has some advice on retailer tricks you can avoid.

Retailer tricks to watch out for

Ramsey warned about many different shenanigans that retailers get up to in order to increase your spending. Specifically, he said not to fall for the following traps that could lead to a busted budget:

  • Buy Now, Pay Later arrangements: These payment plans can make your purchases seem more affordable by allowing you to split up big costs into monthly payments. But, they'll end up costing you more in the end -- even if they promise 0% interest for a period of time. Ramsey warned that most people who sign up for one don't make their payments before the promotion ends and end up getting hit with extra fees -- and this even includes households with high incomes.
  • Sales that aren't really deals: Ramsey acknowledged that some sales are legit and actually help you celebrate for less. "Shopping for deals and sales is actually a great way to make Christmas shopping more affordable -- sales aren't a bad thing at all," he said. But, he warned that sometimes stores mark up the price only to mark it down later. And he made clear that online stores that require you to spend a certain amount to get free shipping can be especially dangerous since you often end up buying a lot more than planned just to save a few bucks on postage.
  • Colors that prompt more buying: There may be a reason why retailers love to plaster their stores in red and green -- and it's not just because it's festive. "The color red creates a sense of 'must act now,' and stores use it to target impulse buyers a lot," Ramsey warned. He suggested really taking the time to think about whether you need items with red sales tags that are designed to capture your attention.
  • Music: Could Christmas carols really be nefarious? If you believe Ramsey's advice, they might be. "During the holidays, Christmas classics might make you more nostalgic and willing to buy things you didn't plan to," Ramsey said. He also said upbeat music can encourage spending by increasing excitement.
  • Smells: Peppermint and pine needs are holiday fragrances that can also evoke a feeling of nostalgia and prompt you to overbuy. Ramsey warned not to let these familiar and comforting scents prompt you to put too many items into your shopping cart.

Should you listen to Ramsey?

Ramsey is absolutely right that retailers use all of these techniques -- and more -- to do everything they can to get you to purchase tons of stuff this holiday season. The good news is, it's easy to thwart them. Just make a list before you go to the store and stick to it so you aren't prompted by store tricks to buy things you don't really need in the end.

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