Whether you like to get your holiday shopping done early or you just love a good bargain, a lot of shopping happens between Thanksgiving and Christmas each year. Part of that shopping includes all sorts of promotions and freebies with purchase.
What’s most interesting about all those promotions and freebies is thinking about how those “bargain” prices still make a profit for retailers. If that’s true, what are those products really worth?
Free Stuff Isn’t Free
On Saturday, I ventured into a mall for a very specific purchase. The saleswoman said, “If you spend $100, you can purchase this gift set for only $50. It’s a $183 value!” The implication was that I was somehow getting $123 worth of free stuff. But you know and I know that the actual value of that gift set wasn’t $183. The retail price of the products inside might be $183, but the retail price doesn’t demonstrate value.
The same is true when you get a free gift with purchase. The company has priced the item high enough to cover all those discounted or “free” items. The company isn’t losing money if I purchase that gift set or get that free tote bag. (Especially if that free tote bag is marketing for the company!)
Products in stores have high mark-ups. Stores are designed to make a profit, and they have expenses: rent, employees, websites, warehouses and more. But how do you decide what’s a good value?
What's in It for You?
It helps to have clear ideas of what we actually need or want, how much those items are truly worth to us, and what the other choices are. Some products are more interchangeable than others.
For example, maybe only one shampoo makes your hair look and feel terrific. You might be willing to pay a premium for it, and scrimp in other parts of your budget.
On the flip side, most people can be happy with a wide variety of socks. If you can find socks that work for you at Aldi or T.J. Maxx, why would you buy them at Nordstrom or Saks Fifth Avenue? (My favorite socks came from TK Maxx, the U.K. version of T.J. Maxx. They are getting very holey. I am sad.)
I’m not saying it’s a bad idea to take advantage of promotions. Often, that’s the best way to shop. Just be aware of how those promotions and “free” items are factored into the price of the items you are actually paying for. And when you shop at retailers or brands that frequently offer promotions or freebies, think about how that is built into the price of the products you are buying.
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