How Black Friday Promotions Are Often Deceptive
How you are being duped into spending more money then you have for the holidays
We all like to think that the holidays bring about peace on earth and goodwill towards men, but there is mounting evidence and substantial documentation to show that the holiday season is often just an excuse for desperate retailers and merchants to con you into spending more money then you can afford.
Take for instance, this example of how Target is using outright deception to get you to buy an Iphone. According to Mike Wehner reporting for bgr.com ,
If you head to Target’s online store and search for “iPhone 7,” you’ll be met with the retailers much publicized gift card promotion, which nets you a $250 store voucher with the purchase of any iPhone 7, 7 Plus, or 6 Plus. It’s a great deal, in line with similar promotions from Best Buy and Walmart, but it’s not the only thing you’ll see on the search results page.
If you scroll down to the actual individual listings for various iPhone 7 models, you’ll see prices that have no reason to exist, much less under the guise of a “sale.”
The iPhone 7, which starts at $649 for the 32GB model and goes up to $849 for 256GB, is being sold for $1,129.99. That’s a hefty $280 premium over the regular price, and for no discernible reason. It’s not a bundle that includes anything else; it’s just the phone, and its “regular” price is marked even higher, by $20.
What’s even more hilarious, is that it’s listed as a Black Friday sale, and its price is slated to go back up on Sunday.
And this price adjustment isn’t limited to the 256GB model, as both the 32GB and 128GB versions are also priced at a ridiculous markup.
What’s worse, people are apparently actually buying these phones at this jacked-up price. Target’s handy little buyers tool shows that the iPhone 7 is being bought for over $1,000.
So what’s the deal here? It’s hard to tell. At first I assumed the prices were the result of some third-party seller antics — Walmart, for example, sells products in its online store that come from third-party merchants, and they can set the prices to their own liking. However, there’s nothing on the store page or individual listings to suggest these devices are being sold by anyone other than Target itself.
Maybe Target discovered the secret to Black Friday: People will buy just about anything as long as they think it’s on sale.
While this is not a new phenomena; it seems that the Black Friday deceptions are beginning to stretch beyond one day a year into an entire month or more. I have noticed advertisements locally that proudly proclaim that the entire month of November is a Black Friday Event. I am not the only one to notice this trend. Hayden Dingman writing for pcworld:
“Black Friday has outgrown itself as retailers have cannibalized the name ‘Black Friday’ and used it to promote deals all throughout the month of November,” says Matthew Ong, a senior analyst at NerdWallet. “This is partially a response to the late Black Friday date in 2013, but this Christmas creep is a trend that’s been ramping up in the last few years and [is] only likely to continue.”
But it’s not just about the timing. A closer look at the deals around Black Friday show how the date has become a buzzword to trick people into pulling the trigger on shoddy deals. Retailers are manipulating prices and the products themselves just to get you into the store. Once you’re in the store, they’ve already won. So before you camp out in line, read on to learn the real deal about Black Friday. “
Many unsuspecting consumers such as yourself make assumptions about how the whole Black Friday thing works. But according to the Wall Street Journal , Black Friday promotions are a part of an annual business planning process.
The common assumption is that retailers stock up on goods and then mark down the ones that don’t sell, taking a hit to their profits. But that isn’t typically how it plays out. Instead, big retailers work backward with their suppliers to set starting prices that, after all the markdowns, will yield the profit margins they want.
And Black Friday deceptions are not new either. Although there may be examples of large well established retailers using deceptions to lure consumers into overspending prior to 2009; this example of how Walmart has been accused of deception for Black Friday was documented by Sue Walsh for technologytell.com shows it has been around for a while.
Customers from around the country are complaining that the deals Walmart promised on Black Friday were given away ahead of time in a pre-sale procedure many are calling a scam because it was not made known to the public.
In Tracy, CA, customers who arrived before dawn to snap up the $198 eMachines laptop that was advertised as being on sale between 5am-10am discovered the stores entire inventory of 37 units had been sold the day before in a non-advertised pre-sale. The manager admitted there was no way for the general public to know about the pre-sale unless they called the store (and obviously there was no way for most people to know they needed to do that), and apparently had not told the line of customers that started forming around 3am that the laptop was not available.
Nearly half of the Black Friday deals studied in the UK from just last year showed that the prices were actually lower at other times in the year as documented by Jay McGregor writing for the Wall Street Journal.
According to a study conducted by consumer watchdog Which?, the latter.
The report found that 49% of 2015 Black Friday deals in the UK were actually cheaper at other points in the year. Which? tracked prices for 178 items across multiple major retailers like Currys, John Lewis, Amazon and Argos for three months before Black Friday 2015. It found that the discount shopping day was only the cheapest, or joint-cheapest, day to buy the tracked goods half of the time (90 out of the 178 deals).
The phenomena of Black Friday Deceptions has even been documented by Government Officials. United States Senator Richard Blumenthal’s office reported:
Some of the tricks and traps that advertisers use to get consumers into their stores or onto their websites include: deceptive and overly broad advertisements, hidden fees at checkout, and emailed coupons that hide the fine print in links to other websites.
For example, a JCPenney circulator advertises, “No interest if paid in full within 12 months.” However, the extremely hard to read, white-lettered fine print says: “Must request at time of purchase. Offer applies to window treatment purchases of $500 or more made between 11/24/13-11/27/13.” In addition, the consumer must have a JCP credit card or a JCP Mastercard. And, if a consumer fails to pay off the amount within 12 months or fails to meet minimum monthly payments, the interest rate – charged back to the purchase date – jumps to 26.99 percent. So any small mistake by the consumer, like not asking for a no interest promotion or accidentally missing a payment, would result in potentially huge interest payments.
So what to do? Well most experts are offering some ideas on how to find out if you are being deceived. This article by Lori Grunin offers some ways of making sure you are not manipulated into spending more money then you have.
- Decide what you want before you shop.
- Research using your favorite search engine or app.
- Unbundle the bundles
- Watch out for hidden fees.
But overall, it is my opinion that Black Friday and Cyber Monday should be completely ignored. And I am not alone on this idea. Aol.com encourages consumers to follow these steps and just skip it all together.
Don’t be quick to fall for overhyped “doorbuster” sales. Oftentimes, retailers will dangle a popular item at a big discount to lure customers in, but what they don’t tell you is how limited their quantities are. These stores know that once they get you inside, you’re likely to stay and spend on the lesser deals, so always call and check their inventory first.
Next, watch out for derivative products. Some Black Friday ads will only include the bare minimum when it comes to technical specs for devices like TV’s, laptops and tablets. Usually, this is because the item on sale is a derivative product, specifically manufactured for Black Friday and the holiday season with lower overall quality and less features. These items may look like their pricier counterparts, but they probably won’t last as long, costing you more in the long run.
Lastly, don’t be swayed by phony markdowns. This is when a sale price is posted alongside an inflated “original price,” creating the illusion of a great deal. This is a classic retail trick, so don’t be misled. Focus on the sale prices and use those as a comparison.
Remember the everlasting tension between businesses and consumers. Business wants you to spend no matter what your means. You as a consumer are responsible for what you choose to spend. And make no mistake. If you overspend due to deception on the part of a business, you will be the one on the hook for it.
Image courtesy of experienceheadphones.com