Avoid These 10 Retail Rip-offs

by Ron Haynes

Living in today’s world of static incomes and rising prices, avoiding a retail rip off that could plunge us into financial disaster just makes good sense. Over the years, I’ve learned to be aware of the strategies shopkeepers and retailers use to separate me from my cash. Have you ever spotted any of these strategies?

1. Limited Time Offers

Sure, some styles or selections may be around for only a few days or weeks, but I’m not going to let that cloud my personal decision making process. After all, “once in a lifetime opportunities” seem to come around about every two weeks … or less.

2. Selling the Payment

Car salespeople are the worst with real estate agents a close second. “Payments” disguise the true cost in many cases. If I need financing for a certain item, I arrange it at my bank first, then negotiate my best deal as a cash payer.

3. Downplaying MY Research

That salesperson in the electronics department or at the car dealership sure does know her products, but my own research may reveal some flaws with the product that she isn’t readily willing to divulge. When I know those flaws, I can make a better purchasing decision.

4. Tricky Prices

Have you noticed the bright pricing stickers being used on shelves today? The prices aren’t lower, they’re just more visible and eye-catching. Some brands will go out of their way to highlight their price even though it was cheaper all along. Try to scan the shelves and make sure that apparent markdown is real.

5. Today Only Deals

“Today Only” deals play on your emotions — fear, jealousy, greed. If a salesperson says a deal is ONLY good for today, I walk away unless I’m certain this is the EXACT product I need and the price is dead on.

6. Brand Claims

Here, gasoline companies are my favorite target. I’ll let you in on a little secret: all gasoline is the same when it arrives at the distribution facility. Shhh, they don’t want you to know! At the distribution facility, minute quantities of various additives are poured into the ka-jillion gallon tanks and ABRACADABRA it becomes a “clean” fuel! Most name brand claims are just hype.

7. Buy Two For $5

Does one item only cost $1.99? I’m constantly amazed at how grocery stores will trick customers with this price tag strategy. Make sure the math makes sense. If 2 for $5 really IS a good deal, do I actually need two? Will one of them go past its expiration before I use it? Will one ring up at $2.50?

8. Twelve Months Same As Cash

If I can’t afford that dining room suite or laptop today, there’s a good chance I won’t be able to afford it in 12 months either. Usually, if a purchaser doesn’t pay in full before the 12 months are up, the credit issuer will back-date the interest. This can also have a detrimental effect on your credit score.

9. Extended Warranties

Extended warranties almost NEVER pay off. Either the product will last beyond the warranty period or getting it fixed will be less than the cost of the extended warranty. Do you think those warranty companies don’t make money?

10. Branded Credit Card Offers

Opening too many credit accounts WILL show up on a credit report and has the potential to have a negative effect on a credit score. When you have too many credit accounts, there’s a greater chance you’ll forget to pay one of them and then the hammer drops! No one wants to overspend or feel exploited after making a purchase.

In our current economy, inadvertently falling for a retail rip off becomes especially painful and even embarrassing. Learn to avoid these retailing come-ons and you’ll be better able to keep more cash in your pocket.

About the author

Ron Haynes has written 1000 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.

If you enjoyed what you just read and would like to get FREE email updates with the freshest articles from The Wisdom Journal delivered right to your inbox, subscribe today! It's ridiculously easy and you can unsubscribe at any time. Since your email address is never sold or abused, you can subscribe with confidence, PLUS you'll get free reports/guides/eBooks, subscriber only benefits, and other perks.


Fiona Regan

I don’t understand why people buy something just because its buy one get one free when they don’t even need it.


Unless it’s something you truly need, me either! Buy one get one free on a gallon of milk? Sure, but good luck with that one! Gallon of gas, same thing. Finding a real buy one get one free is becoming rare in my personal experience, but I AM seeing more buy one get the next at 50% off. In most cases, those “bargains” are designed to move inventory and little else.

Eric J. Nisall

Most of the things you mention, I would agree are scams. The same-as-cash offer, however, I am completely on the opposite side of the fence. Interest-free offers are great ways to make purchases while continuing to have your money work for you, and here is the imortant part: if you have the money up front and you have the discipline to pay it all off by the end of the term. And, its not just 12-month terms; Best Buy sometimes goes up to 3 years, and the furniture stores you mentioned sometimes go even longer than that.

If you already have the cash and a high-yielding savings/checking account, then why would you possibly consider losing the earnings power of your money? You can easily take the interest-free payments, and pay the absolute minimum while maximizing the compounding interest that your cash earns daily. It’s not a new concept, but it certainly makes a lot more sense than paying for the purchase in full just to say that you didn’t take on debt or whatever other reason.


I don’t disagree, but those are big IF’s for most people and statistically, those who make promises to their spouse or to themselves to diligently make those interest free payments never really do. It’s the old gap between a great strategy and great execution.

Here’s another way to look at it: why would a store make this type of offer? It’s because in the broader picture, the average person accepting the offer winds up paying interest because they DON’T pay it off with their high yield savings account. Once people start doing those things regularly, you’ll see 12 months same as cash offers disappear! It won’t be worth it to the retailer.

Eric J. Nisall

I tend to agree with you that it takes discipline to execute the plan, but I have to disagree that the offers would disappear if a majority of the people took advantage of it properly. It is a win-win for both parties when executed properly. The stores get their sales, and thus the profit from any mark-ups on the items and the consumers get to purchase their desired items while maximizing their money by obtaining both the item and the interest. Granted, most people are (obviously) not able to execute but those that can benefit greatly from such offers.


It could potentially be a win-win for the retailer and the customer, but not for the finance companies and they’re the ones that would pull the plug if a majority of customers paid within the 12 month period. What most customers don’t realize is that 12 months same as cash has a steep cost to the retailer. Very few retailers actually offer financing, it is generally done through a third party (such as GE Capital Credit). These finance companies charge the retailer anywhere from 8% to 14% for offering that type of financing (depending on the customer base and it’s history of defaults). The finance company’s money is tied up and they have to get a premium for waiting that long to be repaid (would you let our money be used without a premium?). That means the retailer, who is operating on say 20% margins, is only getting 6% to 12% gross margin on their products. Furniture has a HUGE gross margin (50% to 75%) and they can absorb the high premium charged by the finance companies. The reason I believe the offer would disappear if people ALL began paying within the 12 month period is this: the premium charged to the retailers isn’t the only profit center for the finance companies–it’s also the large number of consumers that let the 12 months elapse without paying the debt. If that portion of their profit disappeared, the finance companies would have to charge more than the 8% to 14% to keep their profits coming in on the money they lend out. How much of a premium would retailers accept? 20%? 30%? There would come a point where the offer wasn’t profitable to the finance company OR the retailer anymore.

Previous post:

Next post: