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An old ‘trap’ with a new name hitting your wallet
“Sweep” – spending more to save money – it’s an old “trap” with a new name that has found its way into supermarkets, retailers and even online gambling.
While there are times when it pays to “save money,” a personal finance expert has described how consumers can avoid becoming “victims” of the marketing ploy.
“The whole concept of ‘spaving’ is to get consumers to buy more,” founder of Kuderna Financial Team and “What should I do with my money?” author Bryan Kuderna said Fox News Digital.
“You see different examples like this across the economy. And what hurts the consumer is if it encourages them to waste money to buy more than they need, just so they feel like, okay, now I’m closing the deal.”
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Some of the most prominent “savings” offers are promotions like “buy one, get one free,” in-store “cash” to use on future purchases, freebies, or even programs like “sign up and save.”
“It’s just different marketing strategies to get consumers to buy more, and in certain cases that works really well,” Kuderna said. “If we use coupons to get what we need and at the same time get a bargain, then it’s certainly a win-win. But as we see so often…it’s not.”
Americans have been struggling under the weight of inflationary pressures for years and higher prices after COVID lockdowns led more families to rely on credit cards for purchases.
From 2021 to the end of 2023, credit balances increased by 47% – the sharpest rise in three years ever recorded. Credit analysts also predict 2024 credit card debt in the first quarter will probably break records.
With finances proving to be a struggle for many American families, Kuderna offered some advice to consumers on how to overcome the “savings” trap and stay in control of their money.
“The best way for consumers to approach a savings deal is to pretend it doesn’t even exist, as if they’ve never seen it,” he shared.
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Consumers must first remember to “buy what they want to buy”, he stressed.
“Don’t buy what you feel pressured to buy. That’s where you almost become a victim of the marketing ploy. And that’s obviously good for the retailer, but not for the consumer.”
He also reminded consumers to exercise “caution” when it comes to store credit cards, despite sign-up bonuses and cardholder perks.
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“The reason you see a lot of these really cool perks is that these store credit cards are very profitable for that retailer, and that’s where people can come in sometimes if they’re carrying these balances. the store credit card or late payment fees or whatever may be insignificant compared to the small savings they got when they opened the credit card.
Kuderna also advised turning off app notifications or unsubscribing from emails if consumers feel “lured” into purchasing by these marketing messages.
“Finally, what I sometimes tell people is a lot of these [spaving deals] are based on buying in bulk and buying in bulk with economies of scale is great for the consumer. But again, if we’re overdoing it and starting to create waste, it’s not,” Kuderna added.
“Know what you want to buy and if you want to go there, go there, but don’t get the same volume at a normal retailer where you’re paying significantly more just to get a small saving,” he said. “That’s where you have to look at what the net savings are from actually falling into some of these savings deals.”
As “salvation” traps become more common and spread to new industries such as online gambling and streaming services, Kuderna urges consumers to be vigilant and avoid becoming financial victims.
“Sometimes you just have to sit down and go back to basics and say, okay, are we getting what we paid for here?”
Original article source: Finance Expert Sounds Alarm Over ‘Digging’ Trend: An Old ‘Trap’ With a New Name Hitting Your Wallet