Research has shown that the Black Friday phenomenon has grown faster in South Africa than any other country in the world. Photo: Supplied

CAPE TOWN – Deeply indebted consumers should think long and hard before plunging themselves even deeper into debt by splurging on luxury goods on Black Friday, says Neil Roets, the chief executive of debt counselling firm, Debt Rescue.

Roets says often deals offered by major retailers seem so good that consumers throw caution to the wind and blow their entire Christmas budget on single expensive items such as high-end TVs and other domestic appliances.

Black Friday is traditionally the busiest shopping day of the year because it kicks off the holiday season. This season is crucial for the economy, especially for some retailers, such as jewelers.

Roets said retailers themselves are in deep trouble because of the contracting economy and they have come up with a host of clever ideas to tempt consumers to open their wallets and purses which is how the idea of Black Friday was born.

“Black Friday was initially slow to take off when the idea was imported to South Africa by online retailer Takealot. Once it took hold, however, it took off like a rocket ship and many traders are now notching up a significant portion of their yearly sales on this day and over the Christmas holidays,” he said.

Roets said many consumers had also developed a degree of resentment believing that they had been pulling in their collected belt for so long that they needed a break and that Black Friday would be the ideal opportunity to splurge on something nice.

“It is my belief that things are going to get a lot tougher before they get better. Now is not the time to act recklessly. On the contrary – it is more important now than ever before to implement fiscal discipline and save whatever money is left over at the end of the month. Buy only what is absolutely necessary,” he said.

The fact that nearly half of young people below the age of 35 were unemployed presented a huge problem. There was little to no chance that current sluggish economic growth would provide jobs for the millions of unemployed, said Roets.

According to the National Credit Regulator almost half of all consumers were three months or more behind in their repayments. The major culprits were credit and store cards followed closely by unsecured debt.

DebtSafe shares Roets’s sentiment advising consumers to be aware that various retailers are after their hard-earned money. “You are probably already seeing the RED sale signs, but in many cases, you might soon also get to see your bank statement reflecting in the RED / minus digits.”

Spending beyond your means can have devastating consequences, and ultimately lead to severe debt.

DebtSafe advises on what to take heed of ahead of the shopping spree:

  1. Retailers often tend to fix prices or offer “deep discounts” on various products and items on either Black Friday or Cyber Monday. You and other consumers can be lured into yet another marketing gimmick – when shop retailers make “discounts” seem bigger than they are. Be careful of those “SALE” signs. Sometimes a “SALE” is not really a discount.
  2. Due to the “pack mentality” reality (the queues, the excitement and loads of people) you get confronted with, you can easily get tricked into following and doing what others do – run, grab, duck, dive and shop ’till you drop. What on earth will you be doing to your poor pocket?
  3. Since it can be difficult to trust yourself in these shopping situations, why not stay away from certain events instead? Various consumers that were part of the 2018 hype have confessed that they had no strategy before they started scrolling online or walked into the shops. Their impulsive and unplanned shopping expeditions landed them in trouble as they bought trollies full of stuff they did not need. Are you also guilty of taking part in former impulsive buys?
  4. Are you sure you want to be conformed to South Africa’s “mindless-swiping culture”? According to 46 percent of the 1000+ respondents that took part in DebtSafe’s Financial Reality 2019 Survey, they were behind with their debt repayments. The typical agreements that they were in arrears with, were: retail credit like clothing accounts or store credit (44 percent) and a credit card or overdraft (30 percent). Learn to live without excessive credit like retail credit, credit cards or loans, and put your “want buys” on hold since it is not urgent.
  5. The South African retail sector is “out for RED” this time of year and, this does not only affect you or consumers in the metro provinces – other areas are also being targeted.
Since these shopping events are fast approaching and right before Christmas, you can be sure to experience some sort of pressure. Take caution when wanting to take part in last minute “bargains”. Stand firm, rather dodge debt, save your hard-earned money and avoid buyer’s remorse.

One final food for thought before you decide to rush online, jump in the car or perhaps join a Black Friday queue: If you don’t need to buy an item at full price, you don’t need to buy it on a ‘sale’.