Retail Gimmicks You Need to Stop Falling For

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Lately, I have been going to the mall a lot more often. 

It is a chance to get out of the house and walk around without being exposed to the chilly weather, and my toddler loves to socialize at those play areas that have themed squishy things to climb all over.  What toddler doesn’t want to crawl through a watermelon slice or slide down a celery stick?  Even if hundreds of sticky children have done it before them?

I really enjoy window shopping, holiday decorations, people watching, and the Auntie Anne’s pretzels.  Dang, those are good.

On my meanderings through the mall, I have been noticing that there are more signs outside of stores to get the casual window shopper like myself to set down their pretzel (fat chance) and get into their store.  And the tricks are getting dirtier.  It’s not just old fashioned sales and clearances anymore.

They really are pulling out all the stops to make sure you get inside and spend your hard earned money.  But most of these sales gimmicks are actually horrible financial decisions disguised as friendly, helpful, and worst of all—smart offers.

I took the time to read the fine print, and I want to let you know which retail gimmicks shoppers need to stop falling for—and how to spot the bad decision a mile away (or at least from the pretzel line).

Store Credit Cards

I want to say up front that I love Target, but I am sick and tired of being offered the REDcard at the register.  Every single time I shop at Target, they try to get me to sign up for the card.  And they aren’t the only store!  Almost every big retail store is offering a store credit card these days.

I know this is an unpopular opinion—but I am here to tell you that store credit cards are a bad deal.  Let’s take a close look at the REDcard terms as an example of why store cards are not a good idea.

Store credit cards are infamous for having a low credit limit.  You might think this is a good thing, a way to control your spending, but it will completely trash your credit score.  A low limit means that when you make a purchase, it will be worth a high percent of your total credit line, which lowers your score.  Not worth it.

Store credit cards also frequently have something called deferred interest, which is designed to suck you in.  Here is how it works.  The customer gets 0% APR for a limited amount of time as an incentive to sign up.   Once that time period is up, you are retroactively charged sky-high interest if you still have a balance on your card.  You are charged interest for all the stuff you bought under the 0 interest period because it is deferred—not gone.

At Target, there is a 23.15% APR on the REDcard, which is about the industry average.  That’s crazy high!  They set up that differed interest trap, and if you aren’t paid in full when your into offer is over, you will be retroactively charged!

With the REDcard, they try to further hook you in by offering you 5%* off on all purchases, free shipping*, an extra 30 days for returns*, and a safe chip-and-pin card (it better be, after all those hacks).  See those asterisks?  *Some restrictions apply.  These things will save you money—IF you can use them, and IF you pay your balance in full.

Don’t be fooled by these discounts!  5% off at the register isn’t worth 23% interest!  The only way to take advantage of these is to pay your card off in full.  And if you can pay for your card in full, why do you need the card in the first place?  Just pay in cash.  Is it worth a measly 5% off when it means there is a pit of alligators waiting to get you if you slip up?  Nope.  Instead, use Ibotta, coupons, and sales to get all the savings without the risk.

Promotional Financing

This holiday season, it seems like every other store has a sign outside advertising their limited time promotional financing offer.  Every jewelry shop in the mall has such a sign, as well as furniture and department stores.  Popular language includes “payments as low as…” and “No money down”.  The kick with promotional financing is that the “deal” is only available for a short time.

Financing through a retailer is basically a line of credit with that store—which is the same thing as a store credit card and has all the same pitfalls as a store credit card.  In fact, you usually get a shiny new card when you finance.  99% of retail financing works this way.

Stores use the term “promotional financing” when they are offering you a line of credit with certain terms that are only available for a short time.  This forces you to make your purchase in a short time frame.  For example, at Reeds you have to pull the trigger on the purchase between November 1 and December 24 to qualify for the promo.  So not only are you making a bad financial decision, you have to make it in a hurry!  Such a bad idea.

It is tempting to walk away with something you covet RIGHT NOW and pay in smaller chunks for the next 5 years instead of forking out all the money today.  And the retailers know this!  That’s why these ads are outside of the store.  If you are broke and walk past a jewelry store, most people would not look becuase they know they can’t buy.  But if you can finance a necklace with the crisp $0 bill you have in your pocket, why not go in and take a look?

It is a trap and a gimmick, and just like with store credit cards, if you can pay off the financing before the promotional term, then you don’t need it in the first place.  Just save up.

The only things you should even consider financing are your home (a mortgage) and a car (car loan).  And even those things are better paid for in cash.   But to finance STUFF is just crazy!  Don’t do it.

Leasing Items

Did you know that stores now offer leasing?  It is particularly popular with stores that sell major appliances like washers, dryers, refrigerators, and mattresses… that kind of thing.

I had never even heard of this until I went into Sears the other day.  They were advertising that you get $20 in points when you open a lease agreement.   First of all…points?  Sounds like monopoly money you can only spend at Sears, thereby keeping you spending money in the store (yup, it is).

With leasing, you have a much lower monthly payment than you would if you were to put the purchase on a store credit card or finance it.  But you don’t own it.  You are borrowing it (leasing it) for at least 5 months, at which point you can buy it for far more than it was worth in the first place or give it back.

It is a whole tower of bad decisions!

With Sears and Kmart, leasing is through an independent company called WhyNotLeaseIt.  This company actually owns your item, not you.  And the rate of interest for buying the item from WhyNotLeaseIt after 5 months is nowhere to be found… I have looked!  All I can find is customer complaints that it is more than 50%!!!

The draw of leasing is that they claim that you don’t need good credit, or any credit to participate—which is different from financing and credit cards.  All you need is a pay stub, ID proving you are at least 18, and a social security number.  This raises all kinds of red flags!  Why would they need to know how much you make and your social if they weren’t running your credit?   Scam alert!

The very sad thing about leasing is that it is marketed to people who have bad credit or no credit and can’t afford to pay cash for home items.  It specifically targets and takes advantage of the poor, the young people just starting out and don’t know any better, the impulsive shoppers, and the people who are already suffering with credit problems.  It’s sick.

Don’t believe me?  Check out their sales website.


Buy One Get One Free, Buy One Get One Half Off, etc.  A lot of stores use this sales gimmick, but it is only worth it if you were planning to buy two anyway.  I am personally guilty of falling for this one.  It is hard to resist.

But if I only need one pair of shoes, it doesn’t make any sense for me to buy two pairs, even if the second pair is discounted. I just don’t need it.  It is better to hunt for a sale on the shoes, so I just get what I want at a discount instead of overbuying because the second item is cheaper.

Sometimes BOGO sales draw me in to buy something I don’t need at all just because I can essentially get them half off. Two pairs of leggings at a BOGO sale?  If I don’t even need one pair, why on earth would I need two?  And yet the sale is tempting enough to get me in the door and shopping for something I don’t need.

The only time BOGO sales are a good deal is if you need to buy multiple of something anyway. Other than that, tread carefully.

Limited Time Coupons

Oh boy, these are another sales gimmick that are really difficult to resist.  Have you ever gotten a coupon in the mail or in your shopping bag that advertises a deal that is only available for a limited time?  And sometimes doesn’t start for a few weeks?

This is such a slick trick.  Retailers want you not just to shop in their store once, but to keep coming back again and again.

My favorite retailer that does this is Yankee Candle.  If I go into the store to pick up a candle for mother’s day, they immediately hand me a coupon that starts in a month or so that is an incredible deal.   I don’t need more candles, I just needed the one for mothers day…but now I am planning another trip and trying to think of who else might need candles.

Just like BOGO sales, limited time coupons are a gimmick that get the consumer to purchase more than they intended to.  If you are aware of this and see it coming, and don’t let the time sensitivity of these coupons pressure you…you will be able to avoid it and save your money for smarter purchases.

Gift with Purchase

I have fallen prey to this one, too.  The “spend $100 and get a free gift card” deals.  Just like the other sales gimmicks, this is only worth it if you are shopping there anyway.  If the free gift pulls you into the store, you have lost and the store has won.

These gifts are a gimmick to make you spend more.  Have you ever noticed that you can’t quite get to the exact amount you need to spend with out going over?   They do that on purpose!  If they say you have to spend $25, everything will be $24.50.  They know what they are doing, and it works.

This season, I have noticed a few stores offering store credit as the gift with purchase.  This is clever.  Not only do you overspend to get the gift, but the gift can only be spent at that store, drawing you back in at a future date.   

Old Navy’s Promo Sign

Old Navy has a promotion where they give you $10 in “super cash” with every $25 spent. I bet you “super cash” is another name for money you can only spend at Old Navy.  Slick.

Victoria’s Secret Reward Card with Purchase

Victoria’s Secret is running a promotion that gives you a $20 reward card with a $75 purchase.  Thing is, I can’t find a bra, PJ set—anything—for $75!  They are either $72 (forcing you to buy something else with it) or they are cheaper, so you have to buy two of a more inexpensive item (good luck finding any item worth $37.50!)

Gifts with purchase are a way for retailers to encourage you to spend even more money, but that doesn’t mean you have to fall for it.

There is only one true retail “gimmick” that’s in your favor.

Sales! If an item you are already planning to buy is less expensive with no fine print, extra purchases, or purchase thresholds to qualify, you win.  Couple that with a coupon and you are really in business!

That doesn’t mean buying something just because it is on sale, but the opposite.  It is about finding the store where the thing you want is on sale.

Store credit cards, financing that haunts you for years just to have a discount, leasing an item only to be charged more than it is worth to buy it out, and promotions that make you spend more money than you plan just to qualify are sales gimmicks that aren’t doing you any favors.  Stop falling for it!  Instead, plan ahead and hunt for sales on the things you need to purchase.  And feel free to meet me over at the pretzel line… I might have a coupon for you. 😉

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