The festive sales from e-commerce websites and offline retail stores are back, starting with Navratri from today, followed by Dussehra and Diwali in October.
Shops and online sellers are ready with offers to lure you in. Websites like Amazon, Flipkart, Jio Mart, Myntra, and more have lined up attractive deals, cashback offers and discounts. Here are four important things you need to evaluate before making a purchase.
Do you need it or want it?
Just because something is available cheap doesn’t mean you should buy it. Upgrading your laptop, for instance, enhances your work productivity. That helps. But a smartwatch or a new pair of shoes that you might hardly use is an indulgence.
“There is a need for a classification of desires and needs before stepping out or going online for shopping to avoid spending on unwanted products,” says Rishabh Parakh, a chartered accountant and founder of NRP Capitals.
“Try pushing your impulsive spending back a bit. Often, after procrastination, desires will fizzle out,” says Harshvardhan Roongta, principal financial planner, Roongta Securities.
Here’s a tip to keep your shopping expenses in check. Make a list of things you need to buy, and keep your focus on this list. “Avoid window shopping,” says Roongta.
Another good way to avoid splurging is to switch off push notifications on online shopping apps because they nudge you to go for offers by luring you with discounts and offers.
Is that product nearing obsolescence?
Sometimes, online retailers offer large discounts, up to 50-70 percent, on select items. At times, such products are available for a limited time only. They could either be a steal or, as Parakh says, “old models and product lines that the retailer wants to get rid of.”
Check out the product details closely. Compare it with the price that an offline or physical store has to offer on the same product.
“Read at least 10-15 customers reviews,” says Nisreen Mamaji, founder, MoneyWorks Financial Services, a financial advisory firm, advising that one looks for attributes like a product’s originality, whether it is an outdated product or a recent launch, its actual price and the discount offered.
Compare online rates with offline discounts
These days, offline retailers have also caught on with their online counterparts when it comes to lining up attractive offers. Mid-year sales, festive offers, end-of-season sales, you name it—malls and physical shops have them all too.
What’s more, at physical stores you can go try that new shirt or pair of shoes to see if it fits and only then do you buy, saving on the hassles of returns to your online retailer if your purchase doesn’t fit well.
“These days, offline retailers offer better discounts or match the price of products being sold online on Amazon, Flipkart, etc. So negotiate well on the price, show a genuine interest in buying a product when you step into a retail shop or an authorised dealer showroom,” says Roongta.
Avoid debt schemes while shopping
Amazon, Flipkart and other e-commerce websites, as well as offline retail stores, now offer a host of debt schemes that include buy now, pay later (BNPL) plans, no-cost EMIs (equated monthly instalments), and EMIs on credit and debit cards.
Remember, there is no free lunch. From multiple charges linked to the debt scheme to the damage of your credit scores getting affected if you default on your EMI even once, the hidden dangers are many.
Keep in mind that no-cost EMIs come at a cost. You are sacrificing the 4-5 percent discount offered by a dealer had you purchased in cash or via debit card. Moreover, in case of a default, the finance company charges around 4 percent interest on outstanding instalments. There are additional charges including processing fees, annual fees, National Automated Clearing House (NACH)/cheque bounce charges, etc.
Similarly, there are processing charges for converting the purchase to a no-cost EMI transaction on your credit card. For instance, ICICI and Kotak Mahindra banks charge a processing fee of Rs 199 plus goods and services tax for every EMI paid on a no-cost EMI credit card transaction.“BNPL and no-cost EMIs schemes are debt traps. In such schemes, people end up buying more than they can afford from monthly savings,” says Roongta. He adds that this puts a lot of unnecessary pressure on finances. You should not have your future income committed to something that you want to buy today, he advises.