How to avoid the Black Friday spending frenzy and safeguard finances
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As South Africans heads towards Black Friday, held on November 26, with an estimated 29.5 million people ready to “shop till they drop” at the sales, debt experts are warning people to be mindful of their finances and not to let a shopping frenzy overtake them.
According to research by personal loan company, Wonga, the average South African spent more than R5 600 at last year’s Black Friday.
According to Finder.com’s Black Friday Shopping Report, released recently, its survey of 1 203 South African adults revealed 74 percent, or an estimated 29.5 million people, planned to shop the Black Friday sales – but only if items are discounted enough.
Their survey found South African adults needed an average discount of more than half price, 60 percent to partake in the shopping event, while one in five South Africans, 21 percent said they would need a whopping 90 percent discount for them to shop the sales. At the other end of the spectrum, just 3 percent said they could be enticed by a discount as small as 5 percent.
Meanwhile, Debt Rescue's survey among 1 000 South Africans, revealed that 86 percent of women indicated that they would participate in the Black Friday weekend, versus 15 percent of men, and among all shoppers, a noteworthy 60 percent would buy their goods on credit, instead of missing out on a good deal.
However, according to Sam Clarke, the chief executive at Skynamo, South African provider of a field sales CRM and mobile ordering app for manufacturers and distributors, the Black Friday discounts this year might not be big due to supply chain issues.
“Around 90 percent of traded goods are transported via sea. But, with bottlenecks at ports due to the pandemic, the result could be that knockout deals this year are fewer and far between. Similarly, retailers’ profit margins are already being squeezed, so there are likely to be fewer deals and smaller discounts on offer,” Clarke said.
“Retailers will just have to adjust their expectations in line with supply constraints and a more muted shopping mood,” said Clarke.
However, Neil Roets, the chief executive at Debt Rescue, said while the lure of great deals might entice the best of us, the frenzy that is called Black Friday could plunge many South Africans into further financial trouble. This as general day-to-day costs keep on climbing.
Roets said, “Have a set budget of the amount that you can afford to spend. Then do your homework into what you want to buy so that you don’t get caught up in the frenzy of shopping for the sake of it as there is a 50 percent discount. Know your prices, as the deals aren’t always as good as they seem.
“Black Friday deals have also started earlier and earlier, so be mindful of your salary, and only spend money that you have available and avoid buying goods on store or credit cards as you will incur interest on those purchases, which could easily negate any discount you were hoping to take advantage of,” he said.
Sebastien Alexanderson, the chief executive of National Debt Advisor, warned South Africans not to overspend and risk become over-indebted with Black Friday and the festive season around the corner.
“This difficult financial climate we’re in is likely to get worse. There is no magic wand to vanquish debt. We need to take responsibility for our finances and seek viable debt relief options. We have to get back to the basics of drawing up a budget and sticking to it. If you have a side hustle that can generate extra income, now is the time to optimise it,” he said.
A recent study by the National Credit Regulator indicated that consumers were struggling to repay their short-term credit.
From the study it showed that credit cards were the type of credit that was most prone (23 percent) by consumers to increasing their debt because of Covid-19 and the reason most regularly cited for increasing debt above the original loaned amount was “late or missed payments” for those with unsecured credit transactions.
Similarly from the TransUnion Consumer Pulse Study for the third quarter for 2021 showed that 41 percent of consumers reported that a substantial proportion of South Africans remained under financial pressure as they had been in arrears for a bill or loan in the past three months.
Meanwhile, shopping safely is also a priority.
Sbusiso Kumalo, the chief marketing officer for African Bank, also has cautioned on overspending, saying give ways to prevent overspending this Black Friday was to create a budget; switch to cash only; recognise what is driving you to shop for non-essentials; set short-term goals to help you overcome overspending and save money instead.
He also warned that whether consumers are in store or online this Black Friday, vigilance with all financial transactions was key.
He said threats like phishing, vishing, ATM skimming and card swapping were some of the techniques criminals use to access your financial and personal details. They have one goal – to steal your money or use your identify to commit fraudulent transactions.
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