Savvy Shopping 101

Savvy Shopping 101

The internet has made shopping both easy and more difficult at the same time. We can now check prices of other retailers anywhere. We can read reviews from both users and experts to make our purchasing decisions. Also, online catalogs offer a much wider variety than what we can find in stores. Even with all of these benefits, there are many pitfalls with online shopping as well. Here are some things to watch out for and how to avoid them so you can get the most out of your online shopping experience.

Dynamic pricing - Prices online can be extremely volatile because retailers are using automated algorithms to adjust pricing according to many external and internal factors. It doesn’t always mean lower prices, getting context for pricing is extremely important.

Here is some pricing data broken down by retailer. You can see how some retailers start matching each other and just how volatile prices can be!

Tip - Don’t just comparison shop, you’ll only find the lowest price at that particular moment. It will likely change price in the next few weeks! Get context for that price! Look for price histories or deal scrutiny community posts.

Salesflation - Retailers always compare your savings to the MSRP, which can create a bigger sense of savings. This is probably the most common tactic but as you've seen from our price histories, product prices trend down over time. Also MSRP is a suggested price and a product will almost never sell for that amount unless somebody happens to buy at the wrong time time. Some retailers will even temporarily increase their prices to make inflate the savings! Be sure to check out price histories to put the current sale price into context!

This product sold from Sears is a prime example of a retailer inflating their advertised savings. 

Tip - Get context for that price! If you know it’s true lowest price, you can properly assess the deal that is being presented to you.

Coupons - Promo codes are used frequently to both encourage sales and to also charge more for someone who might not have found the coupon code.

NewEgg sends out daily e-mails full of coupon codes! If you aren't checking for coupon codes, you could be missing out on some savings!

Tip - Use one of the many services that will help you find coupon codes from the retailer that you are shopping at.

Retailer exclusives - Competition can drive prices down but what if you are the only one who sells the product? Be wary about exclusive products or anything advertised as "Only at *retailer*". Without other retailers they can prevent any kind of price matching and without competition, deals are completely controlled by the retailer. This strategy also allows them to sell a nearly identical product without the worry of price matching. One of the easiest ways is to establish an exclusive color, modify some firmware/software settings, or include an obscure feature.

Look at the "Only at Lowe's" and then look for ones that are not exclusive. If you were to compare them side by side, they are 99% identical. Though they are the same price now, they can diverge, and if you're not careful, you could be buying the more expensive one! To top it off, you can't price match the exclusive one. 

Tip - Anytime you see  an exclusive deal, don’t rush to buy it until you’ve researched alternatives that could be better priced with similar specifications.

Gift Cards - Some manufacturers set minimum advertised prices and retailers skirt this rule by offering a store gift card. If you shop there often enough and would be shopping there soon anyways, it’s probably a good deal.

Target is offering a $20 gift card on a Keurig coffee maker. If you're a frequent shopper at Target this might be a good deal, but if you aren't close to one, it might not be worth the hassle.

Tip - If you aren’t a frequent shopper at that particular retailer, I would not take the gift card into account for your purchasing decision.

Membership or Rewards - Retailers will offer points based on how much you spend that would allow you to get credit towards future purchases.

Rakuten, formerly Buy.com, lets you earn points that can be translated into credits that can be redeemed on future purchases. 

Tip - As with gift cards, this could be a good deal if you frequent that retailer.

Bundling - Add-ons and accessories can make it difficult to truly assess the value that you are getting. What are those add-ons actually worth?

This is a really bad bundle from QVC. The MacBook Air is the 2012 variant, which is retailing for $1149 at the time of writing. The add-ons are not nearly worth the extra $1,000.

Tip - Avoid completely bundled packages, those are very difficult to valuate. Instead if the store does offer add-ons, make sure it is for the official product itself (meaning you can buy it as itself) or it only includes 1-2 add-ons that you can easily valuate.

About me:

I am a Delt from the Gamma Mu Chapter at the University of Washington in Seattle, class of 2004. Even though I graduated with a BS in Aquatic and Fishery Sciences, I found myself at a small startup, Decide.com, helping people find the best products at the best price.