#ConsumerWatch: How to avoid Black Friday buyer’s remorse
Johannesburg - We are days away from the Black Friday shopping bonanza that’s headed our way, and the news is already inundated with specials that are too good to pass up.
It’s perhaps a blessing that this Black Friday falls on the 23th of the month - for many, that means days away from pay day, but retailers have got it sussed, having morphed the craze into a week-long shopping debauchery.
While some might scoff at Black Friday as a slavish appropriation of American culture, for many, it’s an opportunity to buy goods that they wouldn’t ordinarily be able to afford or to stock up on gifts ahead of the festive season.
In the US, Black Friday is held on the fourth Friday of November, the day after Thanksgiving, when retailers kick off the festive season with huge discounts, which makes it the biggest shopping day of the year. However, with seasonal sales and promotions creeping ever closer to Halloween, this is diminishing Black Friday’s importance on the shopping calendar. Retailers are increasingly offering promotions over the entire festive season, rather than concentrate them on a single day – or week.
Picodi, a coupon code website that collects online discount codes and deals for the most popular online shopping sites, travel websites and online supermarkets in South Africa, says its research shows local consumers are spending on average R1 654 on Black Friday.
Its global analysis team surveyed 12 000 consumers from 55 countries and prepared a detailed report about how much money is spent in each country during Black Friday and how they differ from other nations.
Their research, based on 669 respondents in South Africa, shows 87% of them know what Black Friday is; 66% of South Africans will participate in Black Friday this year; 16% of consumers will shop online only; 20% of consumers favour the traditional offline-only option; the average discount in South African online stores reached 61% last year, which “could translate into R2 587 of possible average savings”; and that clothes, electronics and shoes are the most popular items to buy.
South Africans love a bargain, but the problem is that we don’t save and we’re very credit-hungry. So much so that the gross debtor’s book is over R1.8 trillion.
Last month, the National Credit Regulator (NCR) released the Consumer Credit Market Report and the Credit Bureau Monitor. It said credit extension had surged seasonally and that new credit had increased by 8.25% (quarter-on-quarter), from R121.62 billion to R131.65bn. The number of applications for credit increased by 5.79% quarter-on-quarter, from 10.49 million in March 2018 to 11.10 million in June 2018.
The value of “good credit” in the form of new mortgages granted increased by 13.50% quarter-on-quarter and by 9.07% year-on-year and secured credit, which is dominated by vehicle finance, increased by R2.38bn year-on-year. Credit facilities increased by R1.90bn quarter-on-quarter and by R3.30bn year-on year and unsecured credit increased by R2.77bn and R5.94bn quarter-on-quarter and year-on-year respectively.
The NCR says that out of the 24.59m credit active consumers, only 61.1% are in good standing and 38.9% have impaired records. This means consumers’ accounts are three or more payments/months in arrears, they have an adverse listing, a judgment or an administration order.
The NCR warns that if you haven’t budgeted for Black Friday, don’t be tempted to get into debt by buying impulsively on credit.
Jimmy Golele, the acting manager for education and communication at the NCR, notes: “Credit needs to be paid back with interest and fees, and it costs more than to pay cash.”
He warns that splurging without budgeting could be a huge financial setback, at the worst time – the dreaded Januworry: “Consumers should prioritise necessities like their bond or rent, transport, groceries, school fees, insurance, before splurging on Black Friday.”
John Manyike, head of financial education at Old Mutual, said: “There’s a risk of overspending and buying items you don’t really need unless you arm yourself with a strict Black Friday budget.”
According to a recent study by World Wide Worx, online shopping makes up only 1.4% of total retail revenue in South Africa, significantly less than the global figure of 13%. This highlights South Africa’s persistent shopping mall culture.
Manyike offers these practical tips on how to stay out of trouble on Black Friday:
1. Make a shopping list
Making a list with only necessary items before the sales start will help you to focus on what you need when looking out for discounts. Make sure you avoid impulse purchases.
2. Set clear budgets
Having a budget and then not sticking to it is pointless. Make sure your budget is realistic. If you can’t afford a Black Friday budget, rather avoid temptation and stay away from the shopping malls on that day.
3. Look out for affordable gifts
With the festive season around the corner and “Januworry” fast approaching too, you can get a head-start and save some money on gifts and back-to-school shopping. Again, be smart about what you’re buying.
4. Think ahead
Black Friday is a good opportunity to buy non-perishable household items that you know you will always need and that won’t go off. Stocking up on cleaning products and toiletries while they’re on discount, for example, is not a bad idea.
5. Avoid using credit
You will end up paying more in interest over time, possibly even cancelling out the discount and causing a lot of financial distress.
6. Be alert
Always monitor your SMS notifications and report any suspicious transactions to your bank immediately, as fraudsters are also shopping on Black Friday. If you’re shopping online, transact on legitimate sites.
* Georgina Crouth is a consumer watchdog with serious bite. Write to her at [email protected] , tweet her @georginacrouth and follow her on Facebook at www.facebook.com/ConsumerAgonyAunt