Recently, I wrote two introductory guides on buying appliances and mattress sets. Afterward, a few more people asked for something more general, a short guide for sorting through the messaging in home furnishing and appliance advertisements.
I sampled this week’s flyer bundle to find examples of advertising techniques that might be confusing or unclear.
Advertisements are designed to grab your attention. They use carefully worded “hooks” and images to attract your interest. Everyone should appreciate there are good deals, bad deals, and everything else in between. The key is to understand what questions should be asked so you can make an informed decision.
“SAVE UP TO 50% ON select __ BLANK___.” As a former merchant, offering a percentage off is a popular advertising “hook.” Saving up to 10, 20, 30, 50, 70% and more on SELECT items is common. It is important to understand the offers are not on everything, usually, it is only on those things the retailer wants to move. Examples can include discontinued and overstocked items or purchases they made at a discount. The question is to ask, “What is the price the savings is based on, and is that a legitimate price?”
Except for commodity items such as appliances and electronics which are easy to compare prices, furniture and mattress pricing is usually established by the retailer and can vary greatly even for the same item. Don’t be misled by terms like “Manufacturers Suggested Retail Price (MSRP) always look or ask for the name of the manufacturer and the item’s model number and look online for comparison pricing.
“DON’T PAY RETAIL.” The implication is that you can buy something less than what is available in other stores. In my experience, it is a meaningless phrase because whenever you buy something from a store, you pay a retail price. When you hear this phrase, be aware of this fact, compare manufacturer and model numbers and you may find their advertising is simply a gimmick. The phrase “Factory Direct Pricing,” is just another gimmick to give a sense of legitimacy to their pricing without providing any real information.
“BUY THE SAME ITEMS FOR LESS.” The furniture industry is rife with manufacturers that “knock-off,” popular designs for less money, less value, and usually less workmanship. While it is certainly possible to buy the same item for less money, you should ask the retailer for the name and vendor number anytime a store or its salespeople make this claim and verify it yourself. Most retailers assign a “sku” number to their products which only means something to them, ask for the details, and if they will not give them to you, seriously consider shopping someplace else.
“SAVE $XXX.” “Save stories,” are important, but again, only if you can verify the original price. As a consumer, you should be able to ask or check to see if the claim of savings is real or not. Using an online query such as “Best Price in Canada for XXXXXXXXX” should give you a range of prices for the item on sale. Again, ask the retailer to provide the manufacturer and the model number. If they won’t, then consider going someplace else.
“SAVE HUNDREDS OF DOLLARS ON BRAND-NAME MATTRESS SETS.” You will find comparing mattress sets very difficult because of the use of “B-Labels.” Certain bedding manufacturers will provide retailers with their own unique bed names, there are many reasons why retailers do this; however, for the consumer, it does make comparisons difficult. To combat this, ask each retailer for a “spec sheet” on the construction of each mattress you are interested in purchasing and compare, some retailers will even have “comparison” notes provided by the manufacturer.
“SLEEP COMFORT GUARANTEES.” I have seen 60, 90, 120, 200, and 365-day sleep comfort guarantees which state, if you are not happy with your mattress you can return it*. Please note the “*” because there are always conditions. Usually, you have to buy one of their mattress pads, but not always though, and this becomes important later. You must use the mattress for a minimum of twenty-one days, which is the standard breaking-in period, which is legitimate. Usually, you must find a replacement of equal or greater value and pay the difference. You might be limited to one reselection as well.
One of the best mattress salespeople I ever met, told me if you qualify your customer well and sell them the right mattress, you could offer your customer up to a year and the bed wouldn’t come back; it can be a good feature though if they didn’t sell you the right bed. My primary issue about sleep comfort guarantees isn’t that they aren’t a good idea, it’s for you to beware of purchasing a bed that has been returned because of a sleep guarantee.
Usually, retailers will discount and dramatically push the “returned” beds and you need to understand they have been “used.” Be especially careful with buying one of these beds when the retailer does not insist that previous owners use a mattress pad.
“GIMMICKY DESCRIPTIONS.” Recently I saw a retailer use the term “Priced Less” in an advertisement and I double-checked their website and then compared the model number to other retailers. Their “priced less” item wasn’t even a sale price, it was their regular price, and it was $200 more than one of their competitors, so it was just a fancy way to say nothing. Terms like “Customer Appreciation Sale, Manager’s Sale, and even “Going Out of Business Sale,” are all just phrases to grab your attention.
“BUY __BLANK___ AND GET this item FREE.” A simple rule to remember is that nothing about retail is free. A recently famous offer was “buy a certain mattress and get a free TV.” For the people who took the time to compare the specs and pricing on the mattress set with the specs and manufacturer of the television, most times realized they weren’t really saving any money on this “sales gimmick.”
“LOW MONTHLY PAYMENTS.” Some “rent to own” type stores offer this type of promotion. Before signing up, take the time to calculate all of the fees and how much you will have to pay over the term of the contract. Do not be surprised that items purchased at “low monthly payments,” might actually be much more expensive than just paying the regular way.
“BUY MORE SAVE MORE.” This type of offer has become much more common in the past few years. As with any other offer, check the entire package and compare online or at other retailers and do the math. If after verifying the details, it is a good deal, take advantage of it, otherwise, look for another retailer.
“LIMITED TIME ONLY.” This type of statement is designed to create urgency and create the urge to complete the sale before someone else gets the deal. Whatever is being offered may be a great deal; however, trust your instincts, if you have reservations; know “there is always going to be another sale.”
“FINANCING” As a merchant I liked financing. Historically, when presented with financing most consumers spend considerably more than if they were paying cash. I still think financing is a great way to purchase something; however, only if you know the rules because the offers are not all the same. Questions to ask,
- Who is the finance company? This is important because this is who you will owe, it won’t be the merchant usually. Check out their reviews, are they positive or negative. READ the contracts and agreements.
- How the interest is calculated. Ideally, interest should not start until the end of the financing plan and should only be on the unpaid balance after the due date. Unfortunately, many plans are what we used to call “Gotcha” interest plans. “Gotcha” plans accrue interest from the date of purchase and unless they are paid off in full by the due date, you will be charged interest from the date of purchase.
- Where and how you can make payments and what methods of payment they accept.
- What is the APR? The “Annual percentage rate” many retailers charge is calculated using what retailers call a processing fee, which is divided into the term for 1 year is actually an interest rate. The advertisement may say you don’t pay any interest but if you read the fine print, that’s what the APR is.
- Understand that you will likely have to pay the taxes, the processing fee, and other fees at the time of the sale.
- Financing is only available “OAC or On Approved Credit,” and I recommend doing the credit application before shopping. Also, remember if two people are on the credit application, both of you are responsible for making the payments even if you are no longer together.
“READ THE FINE PRINT.” Before buying anything, take the time to review the retailer’s “fine print.” Learn the details about deposits on special orders, which may not be refundable if the item purchased doesn’t fit. Delivery and return policies should be explained. The details about the interest rates charges, expect anywhere from 19 to 39% is not uncommon. Additionally, ask about what their policy is on damaged items and who should be called. Good retailers will be able to answer these questions easily, if your retailer is evasive, go someplace else.
“CHECK THE ONLINE REVIEWS.” Furniture and appliances are expensive, and checking out online reviews is a good way to see if the retailer has a good reputation. Additionally, ask friends, family, and coworkers for their experiences before making a significant purchase.
This is just a short guide, based on this week’s flyers. Part of my job for many years was to examine advertisements and figure out exactly what they really said. For you, whenever buying anything for your home or any other large purchase, take the time and do some research. Read what the advertisements say, filter out the noise, the gimmicks, and the fluff; and then make an informed decision.
Learn to recognize the “hooks.”
Good luck,
Paul.