While the shopping season is one of the best times to find deals not available any other time of the year, it’s also a time when some retailers and companies will publicize illegitimate offers on their products or services. We compiled a list of our top five rip-offs consumers should be aware of when shopping for the holidays.
A popular payment option that many retailers offer consumers is “deferred-interest financing.” It looks very good to the average consumer’s eyes, offering no interest for a set period of time as long as the balance is paid by the due date.
But, the details are in the fine print. If you fail to pay a balance during the introductory period, even as little as $1, or if a payment is missed altogether, the interest is then retroactively applied to the entire original purchase amount.
Around three-quarters of retailers offer financing to customers annually, and almost half offer a deferred payment option. While retailers are beginning to become more transparent about these policies, you should always check online or with customer service in-store to be sure you understand the policies before agreeing to a purchase using deferred-interest financing.
It’s easy to let your guard down on these deals because everyone loves a good bargain during the holidays. During this time of year, online shopping clubs pop up in the search rankings and online advertisement margins more than ever.
What’s so bad about them? Online shopping clubs often offer “discount” prices that are higher than average retail prices at your local department store. You may find incredibly poor or nonexistent customer service, products that aren’t as advertised online, extra fees not disclosed at the time of purchase, and automatic charges to your credit card for a monthly “rewards club” (also known as a bait-and-switch scam).
Before signing up for any online club, make sure you’ve done proper research on the company. Compare similar items that you could find at a local store to what the club offers on their website. Be aware of any pop-ups appearing after you’ve completed a transaction, especially further discount offers. Know that on even legitimate sites, data you enter can be shared with illegitimate partners, including your credit card information in some instances.
If you plan on selling via Craigslist or a similar site, you could fall victim to this holiday scam. Say for example, you place an offer for an item and receive a check from someone who wants to purchase it yet, the check is written for an amount more than what you listed as the price. Don’t accept it!
Phony buyers will tell you that you can deposit the check and refund them the difference. Here’s the issue with their claim: There aren’t any funds to cover the buyer’s check. You’ll end up losing the difference out of your own pocket and the buyer will vanish. Buyers often request a refund by wire, a tell-tale sign they’re in it to get your money as quick as possible before the bank discovers the bounced check. Plain and simple, never accept overpayment for something you’re selling, no matter what. If you do receive an offer for overpayment, make sure and report it to your state’s Attorney General. The easiest way to avoid this scheme? Only accept cash or PayPal for items you are reselling.
We all expect to find FedEx and UPS knocking on our door once the shopping season starts. Be on the lookout though for emails indicating that you have a package needing to be shipped and asking for personal and financial information to complete the transaction. Links sent in these emails are often infected with malware that will spy on personal accounts, giving a hacker access to an otherwise secure online identity.
It’s one thing to walk into a well-known department or big box retail store versus a visit to an unfamiliar website that you’re seeing for the first time. Whenever making purchases over the internet, always thoroughly vet the site, its products, and what previous shoppers have said about the site. Take a look at their policies so you know what information they’ll need (and if you get an email asking for anything else, delete it).
This final ploy is more service-related as opposed to retail from the previous four examples. Each holiday season the Better Business Bureau receives thousands of complaints from across the country regarding moving scams. With kids on holiday break from school and lighter work schedules, the holidays are popular times for people looking to move.
One of the common trends in moving scams is companies that offer low fees yet raise their rates significantly once the job is underway. Companies may even threaten to auction away their customers’ items once loaded on the truck if the raised rate is not met.
It’s tempting to take an offer from a post on Craigslist claiming to offer fair rates. Don’t respond. Ask for referrals from friends or a local real estate agent. Never accept an estimate over the phone. Ask for an in-home estimate in writing. Complete an inventory with the condition of every item you will be taking on the road before the move. Try and select a company that has been in business for more than a couple of months. Some large companies may try and subcontract the work to another firm. If anything you plan to move is highly valuable and harder to replace, purchase extra insurance.
If you read any of the rip-offs listed above and thought to yourself, “These sound too good to be true,” then well done. You spotted a common trait of a rip-off. It’s perfectly okay to look for a good deal when out shopping this season. Just make sure you are getting what you pay for before agreeing to a transaction.