This year, Black Friday will fall on 26 November.
As has been the trend for the last few years, many retailers have already started offering discounts on goods since the beginning of the month.
In 2020, many South Africans took to social media to lament their dissatisfaction with what many termed “Black Friday scams”.
In some instances, prices were inflated, only to be “lowered” for Black Friday, with no real savings benefit to consumers.
Some media outlets have already started price comparison checks for this year’s Black Friday sale, and are finding the same scenario to be playing out once again, with several brands and retailers guilty of this artificial inflation.
However, there remains no doubt that South Africans will still take part in Black Friday shopping.
Sebastien Alexanderson, CEO of National Debt Advisors (NDA), encourages consumers to carefully consider the real cost of their Black Friday purchases, especially if they are not paying cash for an item.
“South Africans, like the rest of the world, are tired and drained after another hard year of the pandemic and its consequences.
“One can understand the human need to buy something which will either bring some joy to oneself or a loved one,” says Alexanderson.
“The problem arises when consumers who have access to credit, use it rashly or without a complete understanding of its full costs, payback terms and conditions.”
“Last year we saw consumers opting to load their grocery cupboards with everyday necessities, as well as spending money on big-ticket items, like home appliances.
“Yet many used either their credit cards, or even accessed a personal loan to pay for these purchases. By doing this, they not only negated the “saving” on these items, but actually ended up paying more (in interest).”
The NDA did an exercise to show consumers what the real cost of their spending might be, should they be using credit to fund their Black Friday purchases.
Considering varying interest rates and repayment terms, it is clear that there is no real Black Friday – or any day – for saving when using credit for purchases.
Alexanderson further points out that a TV priced at R5000 cash, may eventually end up costing nearly double that when paid for via personal loan.
“South Africans are notorious for being poor savers. This has undoubtedly been exacerbated by the pandemic. However, it makes sense to save R500 monthly over a period of 10 months, to be able to afford the same TV, then accessing credit and possibly paying more than double for your purchases,” he says.
Moreover, Alexanderson says that not being able to keep up the instalments on your credit agreement, can see your credit record negatively affected and can lead to harassment by debt collectors and even legal action by creditors.
“No one wants to end up over-indebted and in need of debt relief solutions because of Black Friday purchases,” warns Alexanderson.
In order to help South Africans better prepare for Black Friday, Alexanderson shares practical tips for Black Friday shopping:
– Decide in advance how much you can spend on Black Friday specials, and stick to that amount when shopping days come around
Work backwards from this amount. Make a list of what you wish to buy for holiday gifts and determine how much you can spend. Considering the global impact of the pandemic, family and friends will understand if you scale down on gifts
– Black Friday is not only for luxury items. Look around for essential items (like food and toiletries) that you can save money on, especially when buying in bulk. Add it to your list and include it in your budget
On the day, if you add a purchase/ top-up amount to your list, make sure that something comes off your list. Do your best to stick to your plan and your budget
– Avoid impulse buys of items not on your list
Start checking prices for identified products ahead of time, so that you are sure that you are really getting when Black Friday comes around
If you start planning early enough, it will obviously be better to save cash for your Black Friday purchases as opposed to maxing out a credit card or taking out a personal loan to accommodate your Black Friday spend
– Start looking for stores and online shopping platforms that use the rewards system of your debit/credit/store cards.
– Be vigilant for fraud and online scams around the Black Friday period.
– When buying on your credit card or using funds from an overdraft or personal loan, take the interest rate and repayment amounts into account. Weigh it up against the “saving“ you are getting on an item
Mense, times are tough and the struggle is real. Undoubtedly, every rand saved helps, but be careful not to succumb to the retail advertising hype and madness that can leave you spending money that you don’t have.
We need to play our role in stimulating the economy, but not at the expense of our own personal and financial well-being.
If you are already struggling to make your debt repayments and don’t have enough money available for everyday living expenses, then the rule is simple – if you didn’t need it before it went on sale, you don’t need it when it goes on sale.