Black Friday deals: Purchase or pass, why is it hard to resist?

Q: Our 12 year old son delivers the local newspaper twice a week to earn a bit of spending money. On top of the inclement weather at this time of year, his job is made that much harder with all of the Black Friday flyers he has to deliver. One of us usually has to help him because his papers are easily twice or even three times as big as normal! He enjoys the extra money he makes but it gets us wondering how many people actually take advantage of the Canadian sales. We are careful shoppers and tend to plan our spending, but are we missing out by not shopping Black Friday deals? ~Marcie & Ed

Article by Scott Hannah

A: Black Friday began in the United States and is traditionally known as the day after American Thanksgiving. It is the day when many retailers turn a profit and get back into the “black.” However, it is also the unofficial start of the Christmas and holiday shopping season, the busiest buying time of the year. In fact, it has been such a successful marketing gimmick that Cyber Monday, a shopping day to extend the Black Friday weekend, was created.

Black Friday has planted itself firmly in Canada’s marketing landscape, and Canadian retailers are happy to seize on the hype and create their own promotions to draw in customers. You are, however, wise to question if it’s worth it to shop Black Friday deals.

Why are people drawn to shopping Black Friday deals?

There are countless reasons why people shop Black Friday deals; from time with family and friends, for the love of the hunt, to save money, for the experience, because it’s tradition, or to get all their holiday shopping done at once, just to name a few

However, the biggest reason many people buy into the Black Friday shopping hype is the fear of missing out, FOMO — not getting a specific item or not getting the best deals.

Retailers offer deep discounts on a few items to get people coming in their door, then lesser discounts on other items. And whether it’s online or in person, in Canada or the States, Black Friday is all about getting into the mind of the consumer. If retailers can convince you to spend emotionally rather than logically based on your budget, their marketing has paid off and they’ve won the game.

Paying with your credit card

If you’re routinely in debt with your credit cards, and shop with your credit cards on Black Friday, you could be paying as much as 50 per cent more for everything you buy. That’s on top of the exchange rate if you’re buying from an American retailer in person or online. Plan to pay off what you spend on your credit cards in no more than six months to take advantage of Black Friday or Cyber Monday deals, or what you save at the checkout you’ll spend in interest and fees later on.

How to Get Out of Debt & Stay Out of Debt

Factoring in the exchange rate

This year the Canadian dollar is somewhat weak against the American dollar. If you choose to buy from an American retailer, you will pay about a 30 per cent premium on everything you buy. When considering Black Friday deals from south of the border versus from Canadian merchants, make sure you’re comparing apples to apples before you put down the plastic.

Is Shopping in the U.S. Worth It?

Don’t be fooled — the best deal is the one you can afford

The best way to make sure that you’re getting a deal is to base your buying on your budget. Make your list, check it twice, do your comparison shopping ahead of time, search out your deals, and decide what’s worth buying now and what’s a better deal at other times of the year.

While it’s too late to save up for shopping on Black Friday, it’s not too late to make a plan. If you have gifts to buy, decide how much you can reasonably afford to spend on each person or family. Also decide whom you don’t need to buy for. If you plan to shop for yourself or your spouse and kids, take the time now to outline what you want to buy so that you don’t get swept into the hype and carried away.

Pros and Cons of Shopping in the States

The bottom line on shopping Black Friday deals

There’s more to the holiday season than gift giving and shopping for deals. For some, travel expenses, entertainment or the costs of hosting family and friends in their home far outweigh the price of gifts. For others, alternative gift ideas and spending more time than money are the better ways to go. However, shopping shouldn’t leave you stressed about your credit card debts. Black Friday is the day retailers look out for their bottom line; it’s your job to look out for your bottom line.

Scott Hannah is president of the Credit Counselling Society, a non-profit organization. For more information about managing your money or debt, contact Scott by email, check www.nomoredebts.org or call 1-888-527-8999.

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