Five spending traps to avoid during the EOFY sales
The end-of-financial-year sales means this is one of the busiest shopping periods on the calendar as retailers slash prices across a huge range of products to clear old stock.
Aussies usually jump at the chance to buy big-ticket items on the cheap (after all, who doesn't love a half-price TV?), but the financial impact of the pandemic, coupled with a recession, means that many people are reluctant to spend this EOFY.
Just 27% of Aussies plan to shop the mid-season sales this year, according to recent Finder data, down from 76% in 2019. EOFY sales spending is tipped to hit $2 billion, which is $3 billion less than 2019.
Yet for those still planning to shop, there are plenty of bargains to be had. After a catastrophic quarter, retailers are competing with each other to make the cash register ring, and what better way to do this than by lowering prices?
These price drops mean the EOFY sales are a good time to replace that outdated laptop or purchase a heater for less. But there is more to snagging a good deal than price alone. Refund policies, tax implications and financing options can all come into play.
So before hitting the shops (or jumping online with your credit card), here are some of the major shopping pitfalls to avoid this EOFY.
1. Buying something just because it's on sale
Sure, that half-price widescreen TV may seem like a great deal, but do you actually need it? If the answer is no, walk on. Sales discounts are designed to make you think in terms of the money you're saving, rather than spending. In the lead-up to June 30, make a list of what you actually need, and stick to it.
2. Not checking the return policy
If a product doesn't meet your expectations, you're entitled to a refund, right? Well, not necessarily. Consumer law in Australia dictates that retailers provide a repair, replacement or refund if an item is faulty or not as described. But what if you change your mind?
If you buy an item and decide you don't like it, whether you're eligible for a refund depends on the retailer. Some brands like ASOS and THE ICONIC offer refunds for change of mind, but many brands don't. Some will also refuse to refund sale items, so it's worth checking a brand's returns policy before you buy.
3. Not comparing across retailers
Whether it's a new washing machine or a pair of sneakers, you should always compare across brands before purchasing. Sure, one store may be offering 20% off an item, but how do you know it isn't in stock elsewhere at a cheaper price?
You should aim to compare at least three brands or stores before you purchase to ensure you're getting the best deal. Make sure you factor in postage costs when comparing prices - these can make or break a deal.
4. Not claiming eligible items back on tax
Working from home? You may be eligible to receive a tax refund for any home office equipment purchased before June 30. This includes things like laptops, keyboards, desk chairs and printers. You can claim for the full cost of the item (up to $300), or the decline in value (for items costing $300 or more).
While this can be a good way to break even on certain expenses, remember that you're still spending money, not saving it. It's also important not to fall into the trap of thinking you'll be reimbursed dollar for dollar when you purchase expensive items.
5. Signing up for in-store finance without checking the fine print
Some whitegoods or electrical retailers offer in-store financing. This allows you to pay for items over a longer period of time in a series of installments. But be careful about what you sign up for.
Offers like "interest-free" financing sound appealing, but make sure you read the fine print. Once this interest-free period expires, you may find your interest rate skyrockets, along with your repayments. You'll usually need to sign up for a credit card or store card to receive the funds, which can also carry heavy annual fees and interest.
To avoid being misinformed, always check the fine print before signing up to store finance. And if possible, try and pay for the item outright instead.