Since the early 20th century, the day after Thanksgiving has been regarded as the beginning of the holiday shopping season. Since so many people have the day off, retailers have seized the opportunity to create a shopping frenzy. The day was dubbed “Black Friday” by Philadelphia police in the 1960s due to the heavy traffic.
Black Friday is associated with spectacular deals on coveted holiday gifts. Stores send out circulars a few days to a week in advance, highlighting doorbuster specials and early hours. The strategy has paid off, as Black Friday is well known as the busiest shopping day of the year.
With so many deals from so many merchants, one must wonder if some of them might be too good to be true. In some cases, stores do create misleading advertising and questionable price cuts. But especially when an item is in high demand and available from competitors, merchants must take care to ensure that they don’t lose customers’ trust and cause them to go elsewhere.
Still, there is a bit of a catch with some of the amazing deals you’ll find on Black Friday. Most stores advertise insanely low prices on one or more in-demand items, and these are known as loss leaders. The term refers to the fact that these items are often sold below cost in order to get customers in the door. In most cases, quantities are limited, so customers show up hours before the store opens in order to increase their chances of obtaining the item at the advertised price.
Once the advertised quantity is gone, there is already a crowd in the store. Some customers might leave in a huff, disappointed that they didn’t get what they came for. But most will stay and shop for other items. And that’s the whole point of loss leaders – to get customers in the store and get them to buy items with higher profit margins.
Retailers often take this a step further by jacking up the prices on certain hot items. They might keep them priced high, or advertise an exaggerated regular price with a discount (which amounts to somewhere in the neighborhood of the real regular price). Customers facing long lines might take more time to browse the store, and instead of checking prices elsewhere, they might go ahead and buy what they want there.
How to Really Save Money on Black Friday
If you plan to go shopping on Black Friday, it pays to be prepared. It’s best to go out with a list in hand of the items you want to buy. It’s even better to compare prices on that item from several sources a few weeks before the big day. That way, you’ll know if the price is inflated at any store.
If you can get your hands on one of the loss leaders, that’s great. But if you don’t, keep in mind that other stores might also have good deals on (and higher quantities of) the same item. The store you visited originally also might get more in stock at a later date, and may even offer a better deal.
There are deals to be had on Black Friday. But it’s important to watch out for the tricks retailers use to make more money. If you don’t, you might spend more than necessary. By doing your research, you can come out ahead.