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Taking the lid off the secret shopping tips retailers don't want you to know about!

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Gift Cards and the Retail Apocalypse

As I'm writing this post, it's November, and the Christmas shopping season is starting to gear up.  Every year, one of the most popular gift items is the store gift card.  In many ways they're a great gift.  They're quick and easy to buy.  And you can be sure that the recipient will get something they love from a store where they enjoy shopping.

But before you run down to the mall and hand over your money, you might want to do a little research.  It's no secret that a lot of brick and mortar stores have been hit hard by what's been called the "retail apocalypse" in recent years.  Since 2010 over 12,000 physical stores have closed down for various reasons.  Many other retailers are on shaky ground, hoping that this Christmas season will make up for the dismal quarterly profit reports they've received the rest of the year.  They won't know what their status is until the final tallies from sales and post-Christmas returns become available in January.  As has become the new norm, the first few months of the new year will bring a slate of bankruptcy and store closing announcements.

What happens to gift cards when a store declares bankruptcy?

Quite often, when a store declares bankruptcy, they will cease to honour their gift cards.  If a store is hoping to restructure and work their way through bankruptcy, they may ask the courts to allow them to continue to redeem gift cards for a limited time as a gesture of good will towards their customers.  But they don't have to do this.  Also, the courts have the final say in whether or not the store can continue redeeming gift cards.  Sometimes a store may be purchased by a new owner and remain in business.  However, the new owner may decide not to redeem old gift cards.

There are other problems as well.  Even if the retailer may stay in business during the bankruptcy and continue to redeem gift cards, they may decide to close your local store early if they can't work out a deal with the landlord.  And when you go in to redeem your card, you may find that there is little merchandise left and no new stock coming in, you may not be able to complete a collection of items you want, and the store may no longer have any means to transfer merchandise between stores to fulfill customer orders.

How do I avoid losing money on gift cards?

You might be tempted to ask store staff if it's safe to purchase a gift card, but don't.  Quite often front line retail employees are told nothing about the company's financial woes, and many times bankruptcies and store closings will come as a complete shock to them.  Even if they do have an inkling, saying anything about a store's financial situation to customers could be grounds for immediate termination.  And no one needs to be out of a job right before Christmas.  Don't do that to them.  Don't put them on that spot.

But fortunately, since you're reading this blog post, you have the power of the internet to find the information you need yourself.  You usually don't have to dig deeper than a few Google searches.  First just try searching the name of the store.  Do they have a parent company?  Do a search on that, too.  Check out Google News.  What kinds of press releases are they putting out?  What are other people saying about them?  Try searching the company name and the word "stock."  That will give you more information about how well they are performing financially.

There are some very common red-flags to look for in your search.  For example, has the store gone through several CEOs and/or CFOs in the past couple of years?  Excessive movement in the C-suite indicates that shareholders are not happy with the company's performance and are trying to find the right combination of people to save their investment.  Do financial analysts say things like, "slow to adapt to new technologies," "out-of-touch with consumers," or simply "avoid investing?"  Do charts of their stock prices show a steady decline?  If you're seeing indicators like these, keep your money in your wallet, and don't buy the gift card.

Another search you can do on Google is "stores closing in 2020" or whatever the new year will be when you're reading this.  Several news publications regularly publish articles with lists of stores that will be declaring bankruptcy, or closing stores in various locations.  Check to see if the store you're shopping at is on one of those lists.

So what should I do?

Now that you've done your research and the store where you were thinking of purchasing a gift card doesn't look like such a good option anymore.  What other options are there?

  1. Instead of purchasing a gift card, find out what your recipient like to buy from that store, and consider buying that as a gift.  If she likes a lot of little things from that store, ask the staff to help you put together a gift basket.
     
  2. If you're really not sure what she wants, but she really likes the store, maybe buy her a gift card, but give it to her before Christmas.  Make sure she knows that the company may be in trouble and that she should spend it as soon as possible while there is still stock and selection left.  As I said above, Christmas is the make and break season for many retailers, and they are still doing business as usual so they still can do what is necessary to bring in what she wants if it's not currently in stock.
     
  3. If gift cards from other stores are an option, then you should probably go that route, particularly if you think that your recipient might not be able to get out and spend their gift card right away.
     
  4. Or, forgo the gift card idea completely.  Spend some time with your recipient.  Find out what she or he really likes, needs or wants, and just buy that for her or him.  As a bonus, you'll end up spending quality time with that person, and perhaps in the process make some memories that will be treasured long after any gift has been forgotten.

Help!  I've just received a gift card, and I think the store might be heading for bankruptcy.  What should I do?

If you receive a gift card for a company that is on shaky ground, then my advice is spend it as soon as possible, and spend every last penny available on the card.  If they don't have anything that you want for yourself personally, do they have anything that you might be able to use as a gift for an upcoming birthday, shower, wedding, graduation, or anniversary?  If that's not really an option, then what about buying a really cool item that you can then turn around and sell on Craigslist, or Kijiji?

If you're stuck with a gift card and the company has already gone out of business, then you might be able to put in a claim, because a gift card is really just an unsecured loan of money to a store.  However, it may take months, and you'll be behind a long line of other creditors who are also waiting to get paid, and what you might get back could be just pennies on the dollar.  But another option could be if the purchaser of the gift card bought it on a credit card, their credit card may have a purchase protection program that would allow them to refund the purchaser's money.

Anyway, I've given you lots to think about this holiday shopping season.  So do your research.  Spend any gift cards you may currently hold in your possession, because you never know, and the selection in stores right now is really good.

Happy shopping!

 

 Posted in General

4 Items to Spend Money on in Order to Save Money

If you're just starting out, or starting over, furnishing a new home can seem overwhelming.  You may be tempted to go cheap on some of the basics because you need something right away.  It's okay to do that if you need something immediately, but realize that what you purchase will not last for long, and it will need to be replaced sooner rather than later.  The more you have to replace a worn-out or broken item over the course of years, the more money you will end up spending on it.  So here are a few items that you should buy the best quality you can afford in order to save money in the long run:

Bedding and Towels

If you think about it, you spend one third of your life sleeping.  And it's hard to fall asleep when your sheets are stiff and itchy, and are so pilled up that you feel like you're sleeping on sandpaper, or gravel.  Towels are another item that you use every single day.  And it's so annoying when the new towels you've just bought fall apart in the wash, or shrivel up along the decorative woven stripe (it's called a dobby, if you're wondering).  Buying the best quality you can afford in these two items will save you a lot of money in the long run.  Better quality means your sheets and towels will be more durable, that is less prone to ripping and fraying, and they will last many years longer than cheaper linens.  So instead of having to replace them every year or two, you should expect to get between 5 to 10 years use out of them.  I have sheets and towels that I purchased 15 and 20 years ago that I still use often today.  Quality lasts.

Furniture

While cheap furniture often looks great when it's new and trendy, it doesn't last very long.  Within a few short years you find that your item has become kind of wobbly, maybe the legs have come loose, some of the laminate has peeled off or the corners are chipped.  Often cheap furniture can't be repainted, restored, or repurposed.  On the other hand, good quality furniture will last for decades.  And if you're hard-pressed for money, you can often purchase very durable pieces second-hand for a very low cost.  Often you can repaint or refinish items inexpensively yourself to match your decor.  As trends and your taste changes over the years, a good quality piece of furniture can be made over to match your needs however many times as you wish, unlike cheap furniture which often ends up in the landfill after a few short years of use.

Dinnerware

This is another thing that most people use every single day.  What a lot of people don't realize is that plates that have become chipped or cracked are no longer food safe.  They can harbour harmful bacteria in their rough surfaces that can make you and your family very ill.  So they need to be replaced.  Certain types of ceramics, stoneware especially, are prone to chip more easily, even if they are hand washed every day.  I'm not saying not to buy them, but you may want to save the pretty dinner plates for special occasions, and get yourself something more durable for every day use.  Materials like porcelain or ironware are less prone to chipping and might be more suitable for everyday use - especially if you have family members who are a little rough or careless when loading or unloading the dishwasher.

Freezer

I know this is a big purchase, but if you have the space in your home, and can afford to get one, then buy it!  It will save you so much money on food in the long run that it will literally pay for itself.  With a freezer, you can take advantage of lower prices when buying bulk foods, as well as grocery store sales and discounts.  If you garden, you can use it for storing a lot of different types of foods you grow so you can enjoy them throughout the winter season.  You can use it to create freezer meals that can be taken out and thawed as needed.  And you can use it for storing leftovers for quick, easy meals and to prevent spoilage and waste.

While it seems counter-intuitive to spend a lot of money on basic household items, you will end up saving money in the long-term.  Remember, life is a marathon, not a sprint.  And it's good to come home to things that are reliable and give you peace of mind.  If they are not breaking down, you don't even have to think about them. And the money you will save in not replacing them can go to more worthwhile directions.

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 Posted in General

The Single Most Important Thing You Can Do To Save Money

When my dad was around 13 years old, his homeland, Poland, was invaded by both Germany and the former Soviet Union. As a teenager, he became witness to many atrocities that were committed against his countrymen and women by the invading forces.

These experiences left an indelible mark on him for the rest of his life.  But it wasn't until years later I realized a weird piece of advice he would always give my siblings and I was born from the horrors he witnessed.

It was when we were buying new shoes, he would always insist that we got the best quality and best fit that we could afford.  I used to laugh it off.  There were so many pretty shoes, what did it matter if they gave me a little blister after an evening of dancing?

My dad rarely talked about his experiences during the war.  But one day, he was proudly showing me a fine pair of Italian leather shoes that he'd gotten an exceptional deal on, and I asked him why he always insisted on getting the best quality shoes.

Then he told me about the friends and neighbours who disappeared in the dark.  The soldiers would pound on doors in the middle of the night.  Terrified and half-asleep the people had to dress quickly, never knowing if they would return home or not.  Often they were forced to march at gunpoint - sometimes for miles.  Cheap shoes became deadly.  A broken heel or strap, or shoes that pinched or blistered could make a person fall behind, slow up the pace of the group.  Without mercy, they could be shot - a warning for the rest of the group to keep up or die.  Even if one was able to march in ill-fitting shoes, a blister left to fester for days or weeks without proper medical attention could mean a painful death from infection.

Luckily, today we live in a peaceful land.  And hopefully, dear readers, none of us will ever have to experience what my father and many others have gone through in times of war and invasion.

But the lesson that my dad learned can be applied to so many facets of our lives:

"Buy the best quality you can afford."

Not only does the best quality have the classic good looks that will stand the test of time, but the durability of a well-made object will save you money throughout your life.  If you get bored with your purchase, quite often the item can be altered or remodeled at a lower cost than buying new.  Or it can be recycled or even upcycled into something new.

It may take you a few years to see the return on your initial investment, but when you calculate the costs of cheap items that break and have to be replaced often, versus one well-made item that lasts and lasts, then you can see that you're not only saving your hard-earned money, but you're also keeping things out of the landfill and helping save the environment for future generations.

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 Posted in General