Even as the country battles a massive economic slowdown and tries to emerge from the lockdown, retailers of non-essentials have started announcing pre-bookings and offers. Central, a chain of retail stores operated by the Future Group has announced pre-bookings for shopping of apparels, footwear, etc. Similarly, LG and Samsung have opened pre-bookings for their consumer electronics devices online. Along with pre-bookings, these companies are offering gifts, discounts and cashback schemes to gain the attention of customers.
Many customers may fall into such pre-booking shopping traps. To avoid getting into such a mess, you must be aware of how discounts work and also develop financial discipline in these COVID-19 times.
Decoding the shopping offers
Central has rolled out pre-booking shopping vouchers for customers. These vouchers can be purchased online from the company’s website. When you purchase a voucher worth Rs 2,999 or Rs 4,999 you get to shop for stuff worth Rs 4,000 and Rs 7,000, respectively. The pre-booking voucher will be sent to your registered mobile number. The voucher can be redeemed across any Central store in India after it is opened after the lockdown ends. You can redeem this voucher only to shop for apparel, footwear and handbags.
You have to shop and redeem this voucher within the first 30 days of the store’s opening. Also, you can shop only from preferred store in selected area as mentioned while purchasing the voucher online. Harshvardhan Roongta, Principal Financial Planner at Roongta Securities points out, “You cannot avail the additional shopping benefit if you shop between the 30th and 180th day of the store’s opening.” However, you can shop for the voucher amount. Roongta says, “According to the terms and conditions, you cannot redeem this shopping voucher after 180 days of the store’s opening. You will not get any refund.”
LG and Samsung have opened pre-bookings for consumer electronic products on their websites. The deliveries will be done from the nearest authorised retailer after lockdown restrictions are lifted by the government in different parts of the country. However, the delivery of products purchased online could be delayed in case you live in containment and red zones.
Samsung is offering a discount of up to Rs 6,000 on its smartphones and up to Rs 40,000 on ultra HD smart 4K televisions of 55 inches size. The discount varies for these products. The companies are even offering cashbacks of up to 15 per cent for using specific credit or debit cards while purchasing. Additionally, Samsung is offering no-cost EMIs with long-term financing options of up to 18 months. Often, no-cost EMIs are offered for up to 12 months. Raj Khosla, Managing Director and Founder, MyMoneyMantra says, “Post lockdown, if you shop for consumer electronics from authorised dealers without opting for the no-cost EMI scheme, you may get an additional discount on the purchase. But with a no-cost EMI, for pre-booking online, you aren’t offered such additional discounts.”
Don’t to shop from specific stores or e-commerce websites just yet.
The products offered with these discount schemes may be outdated. So, stay alert and shop for the latest versions online.
Avoid shopping for non-essentials in a hurry
Given the very difficult economic environment that we live in – with job losses and pay cuts galore – it is better to be prudent on spends. Don’t splurge if you don’t have an immediate need. These companies are offering discounts and cashback schemes because they want to convert liquidate their inventory soon.
Khosla says, “Eventually don’t block your money right now in shopping of non-essentials due to discount offers. Cash is king for at least the next 180 days. So, spend wisely.”
Assess your cash flows and job situation first. If your job is secure and you still have EMIs to pay off, then repay your loans first. The COVID-19 pandemic isn’t going away soon and the job market would be on tenterhooks for quite some time. So, as consumers, we need to be measured before opening our wallets too much, too fast. “Discretionary spends are going to be slow for quite some time. People aren’t – and ideally should not – rush out to buy luxury items and goods which they can push off for some more time,” says Lakshmi Iyer, Chief investment officer-debt, and head-products, Kotak Mutual Fund.
“Rather than spending money on shopping of non-essentials, the first priority should be to repay the outstanding liability, and the second to create a passive source of income. Then, if you still have money left, you can buy non-essentials,” says Anuj Kakkar, Partner at financial advisory firm, Vriddhi Advisors.
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