It is that time of the year when no matter where you look, discounts and sales are being promoted.
But setting yourself a budget and being wary of scams can make this festive season more merry.
This Black Friday, typically the biggest shopping day of the yearexperts are offering cautionary words of wisdom and budgeting advice on how to make your money go further, spending red flags to look out for when hitting the sales and how to tell a scam from a bargain.
Online safety organization Netsafe says this time of the year brings a big spike in scams, particularly targeting online shoppers looking for Black Friday discounts.
“Whenever we’ve got these promotions there is also a risk of scammers being there too,” Netsafe chief executive Brent Carey said.
“We call this the peak scam period for online shopping from October through to the Boxing Day sales because more of us are looking for those bargains.”
Scams were increasingly becoming more clever and designed to be much harder to distinguish from real websites and retailers, Carey said.
Watch out for scams
Fake websites are the biggest risk for online shoppers, with scam activity in this area spiking significantly in the lead-up to Black Friday and Christmas, Carey said.
Last year, sites emulating companies selling branded goods were the most-reported scam at this time of the year, affecting predominantly older people trying to buy designer brands for their children and grandchildren, Carey said.
He urged shoppers to think about what price was being asked. If it seemed too good to be true, it probably was.
He urged people to exercise caution when making a purchase online and to research a seller when shopping through social media platforms.
It was easy to set up an online shop on Instagram and Facebook.
“If a website’s name and website don’t match up to the goods, be suspicious and pay close attention to the images.”
Shoppers could run a reverse-image search to check if photos advertising the goods had been taken from another website. They could also check when a domain name was registered and company reviews before making a purchase.
If a domain name was recently registered this could be a red flag that the site could be fraudulent, he said.
Delivery scam texts
Carey said consumers should remain vigilant and expect to see a rise in delivery scam messages, telling them that they had to pay a customs duty on a package or had an item that could not be delivered.
These were often text messages but sometimes emails, which tried to get the recipient to click on a phishing link.
These scams, alongside gift card scams, were increasingly common, he said.
Gift card scams are when fraudsters try to entice the shopper to spend a certain amount of money on either a fraudulent or compromised website in return for free money in the form of a gift card.
Pay with a credit card when shopping online
Making online purchases with a credit card is recommended as another level of consumer protection – but it also poses an elevated potential risk.
If the website ended up being fraudulent then scammers could have access to a shopper’s personal information, Carey said
“Giving over your credit card details, you need to make sure you are doing so securely. It can be a protection, but also a risk.”
He advised consumers to check that a website was secure before entering any credit card details and to make sure there had been no redirection to another website before proceeding.
Other websites could harvest personal information and lead to identity theft.
Making a purchase with a credit card allowed a customer to dispute a transaction with their bank if no goods arrived, although this needed to be done within 30 days of the transaction.
Netsafe has received more than 15,000 reports of scam and fraudulent activity so far this year and reported losses so far have increased to $35 million in the year, up from $20.5m.
Reports of scam and fraudulent activity to Netsafe have grown 20% each year in recent years.
When a bargain is not actually a bargain
Don’t overconsume. And remember, a bargain is only a bargain when it is an item that you actually need.
Enable.me financial adviser Nadine Higgins warns shoppers not to get into debt for the sake of nabbing what is too often perceived as a bargain, when actually it is not.
“Too often we focus on what we ‘saved’ when in reality if it’s not something you were planning to buy anyway, you haven’t saved a cent you’ve just spent money – no matter how good the discount,” Higgins said.
“Think hard about whether extra stuff is really going to make Christmas happier, or just the New Year more stressful. Debt (outside of a mortgage) is a massive handbrake on your future financial progress – not to mention a massive potential source of stress.”
She advises consumers not to buy stuff they can’t afford for people who often don’t want – or need – it.
When it comes to making your money go further, establish a budget and consider spending a little less in preparation for what could be considered a rainy day next year, said Higgins.
“Don’t buy under pressure – whether that pressure is wanting to get out of the mall because the kids are losing it, or it’s Christmas Eve and you just want to tick off the list – that’s a recipe for panic buying and overspending.
“Let your fingers do the walking first – research online the best place to buy something before you step into a store. Incurring interest is only going to make Christmas more expensive, just later on, so avoid it if you can.”
Nadine’s advice for shoppers:
Establish the parameters – establish what you can afford, don’t just write a blank check for Christmas – that’s the quickest way to end up repaying it into the New Year, with interest.
Talk to the family – many of the extended family may not want or be able to afford the pressure of giving to everyone, either. If the family wants to give to your kids, ask them to buy things the kids need for the year ahead like clothes or shoes.
Think ahead to next year – it could be a tough one for some, especially if the mortgage is coming off a low fixed rate and will go up significantly, so factor that into your Christmas budget.