Wednesday, July 24, 2024

Avoid these Prime Day pitfalls for smarter shopping in July

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Black Friday used to happen only in November. But even as we’ve been getting used to the idea of those sales creeping into October, retailers have also been conditioning us to associate a third month with big deals — July.

This month has sales scheduled from Amazon (Prime Day, anyone?), Target, Walmart and other big retailers.

“Consumers are being trained,” says Ayalla Ruvio, associate professor of marketing at Michigan State University. “Right now, it’s almost like tradition. Once you train consumers, they’re expecting it. They’re getting ready for it.”

But labeling a sale as “Prime Day” or “Black Friday” doesn’t necessarily make it a bargain. Protect your wallet this month by steering clear of these four shopping mistakes.

1. Letting time-sensitive deals decide your spending

The hallmark of these July sales is urgency. They don’t last forever. And that could push you into a transaction without thinking twice.

On one hand, the pressure is real. Products like clothing, shoes and cosmetics that were marked down with deep discounts have sold out in prior years, Ruvio points out.

“Consumers that think a product will be there, that may be the most common mistake, because things are being sold fairly quickly,” she says.

If you see a price drop on an item you’ve been wanting for a while, it’s a good idea to grab it while you can.

On the other hand, for deals you happen across while browsing and never intended to buy, step away from the laptop, at least for a little while, to weigh the purchase. Try removing items from your cart or saving them for later.

“It feels great to get a deal,” says Adam Craig, associate professor of marketing at the University of Kentucky. But sometimes that good feeling leads to impulse purchases you may regret later.

2. Falling into prolonged spending

Compounding the time-sensitive element is the confusion when so many sales happen at different retailers. The catch? The sales won’t all happen at the same time.

Amazon Prime Day is July 16-17 this year. Target Circle Week happens earlier and runs for longer — July 7-13. Walmart’s “Deals” event overlaps Target’s sale, running July 8-11.

Why are retailers spreading out their sales? It’s a strategy, says Craig. If retailers get out ahead of Prime Day, they think they can take some of the shopping dollars from Amazon. Keep a budget in mind before you shop the first sale — a budget that will cover the second and third sales too.

But that’s not all. Retailers are also banking on making you a customer for longer than these sales. “A lot of these events may not just be about getting revenue during the summer,” Craig says. “It might also be about getting consumers hooked into the retailer and part of their ecosystem.”

Access to Amazon’s big sale is limited to people with an Amazon Prime membership, for example. Target’s Circle Week promises deep discounts and personalized bonuses to members of its free loyalty program.

“If there are promotions that get me to log in and create those accounts, now that retailer has my data,” Craig says. “Now they can more effectively target me and get me shopping with them more often.”

3. Getting distracted by the discount percentage

Products included in July sales are likely also discounted at other times of the year. Keep that perspective when deciding which deals are worthwhile.

“Even if it looks like it’s a good sale on Amazon or one of these other sites, I try to see if I can find anything about the price history,” Craig says. He uses price-tracking websites like camelcamelcamel and Keepa to look back at the Amazon price patterns of a product over the past year or more.

“You can see, hey this product is something that goes on a 20% sale every two months,” Craig says. “Yes, it’s on sale for 20% now, and it’ll be on sale for 20% in a couple more months, so I don’t have to buy it right now. If I do see a product that’s on a great sale relative to its price history, I’d be more tempted to pull the trigger.”

4. Forgetting about Prime Day after it’s over

After you’ve successfully snagged big savings, your work isn’t done. Don’t forget about Prime Day after the last Amazon box has been delivered. While it’s important to track your expenses all year, take an even closer look at your spending after a higher-than-usual shopping month.

Come August, look back and see how much you spent on Prime Day (and competing sales) compared to how much you set out to spend. Then adjust future budgeting allocations accordingly, says Chris Woods, founder of Silvis Financial in Charlotte, North Carolina.

Say your budget allows $50 of gift spending a month. “Maybe you have your next three months of gift-spending that happens in July,” Woods says. “If you know that, you say to yourself, ‘OK, I’m not going to spend on gifts the next few months because I have exhausted that budget in the month of July.’”

Woods also recommends looking at your credit card statements for all of the generic “Amazon” charges. Since Amazon purchases can run the gamut from electronics to household essentials, break down your charges in more detail in your personal budget to see spending in different categories.

If you follow the 50/30/20 budget, for example, 50% of your take-home pay goes to needs, 30% to wants and 20% to savings and debt repayment beyond the minimums. Some of your July spending may come from your “needs” allocation, while other items may belong in your “wants” category.

Whether you shop, browse or skip the July sales entirely, perhaps the best advice is the most simple. This won’t be your last shot at savings. “Please remember, there’s always the next sale,” says Ruvio.

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