Black Friday used to occur exclusively in November. However, as we have become accustomed to sales extending into October, retailers have also made July a month associated with significant discounts.
This month features sales from Amazon (Prime Day, anyone?), Target, Walmart, and other major retailers.
“Consumers are being conditioned,” says Ayalla Ruvio, an associate professor of marketing at Michigan State University. “It has almost become a tradition. Once consumers are accustomed to it, they start anticipating and preparing for it.”
However, simply labeling a sale as “Prime Day” or “Black Friday” does not guarantee it’s a good deal. This month, protect your finances by avoiding these four shopping mistakes.
1. Letting time-sensitive deals dictate your spending
The sense of urgency is a key feature of these July sales. They are limited in time, which might pressure you into making impulsive purchases.
While products like clothing, shoes, and cosmetics with significant discounts have quickly sold out in previous years, Ruvio highlights the risk of consumers assuming products will always be available.
If you come across a price drop on an item you’ve been eyeing for a while, it’s wise to seize the opportunity.
However, for deals that catch your eye unexpectedly, consider stepping away momentarily to evaluate the purchase. Remove items from your cart or save them for later to avoid hasty decisions.
“Getting a good deal feels great,” says Adam Craig, an associate professor of marketing at the University of Kentucky. But that feeling of satisfaction can sometimes lead to regrettable impulse buys.
2. Falling into extended spending
Adding to the time-sensitive element is the challenge of keeping track of multiple sales from different retailers. The catch? The sales don’t all happen simultaneously.
Amazon Prime Day falls on July 16-17 this year. Target Circle Week starts earlier and lasts longer, from July 7-13. Walmart’s “Deals” event coincides with Target’s sale, running from July 8-11.
Retailers are strategically spacing out their sales to compete with Prime Day in an attempt to attract shoppers. Before diving into the first sale, establish a budget that can accommodate subsequent sales as well.
Furthermore, retailers aim to retain customers beyond these sales events. “Many of these events are not just about generating revenue during the summer,” says Craig. “They are also about fostering long-term customer relationships to keep shoppers engaged with the retailer.”
Access to Amazon’s major sale is restricted to Amazon Prime members, while Target’s Circle Week offers exclusive discounts and bonuses to members of its loyalty program.
“By promoting account creation and engagement with these promotions, retailers gain access to valuable consumer data,” Craig explains. “This allows them to tailor marketing efforts more effectively and encourage repeat business.”
3. Being swayed by discount percentages
Products included in July sales may also be discounted at other times of the year. Keep this in mind when assessing the value of deals.
“Even if a sale looks enticing on Amazon or other sites, I always check the price history,” Craig says. He utilizes price-tracking tools like camelcamelcamel and Keepa to analyze a product’s price trends on Amazon over the past year or longer.
“By examining the price history, you can determine if a product typically goes on a 20% sale every couple of months,” Craig explains. “If the product is currently on sale for 20% and will likely be discounted again in a few months, there’s no need to rush the purchase. However, if the current sale offers a significant discount compared to historical prices, it may be worth buying.”
4. Forgetting about Prime Day once it’s over
After securing substantial savings, your responsibility doesn’t end. Reflect on your spending not just during Prime Day, but throughout July, and adjust your budget allocations accordingly.
In August, review your expenditures during Prime Day and competing sales compared to your planned budget. Chris Woods, the founder of Silvis Financial in Charlotte, North Carolina, suggests modifying your budget for future months based on your July spending.
For example, if your budget allows $50 for gifts each month, and you exhaust that budget in July due to Prime Day purchases, refrain from additional gift spending in the following months.
Woods also advises examining your credit card statements for generic “Amazon” charges. Categorize your charges more specifically in your budget to track spending across different areas.
If you adhere to the 50/30/20 budget, where 50% of income goes to needs, 30% to wants, and 20% to savings and debt repayment beyond minimums, allocate your July expenses accordingly.
Whether you participate in July sales or choose to skip them, remember that there will always be more opportunities for savings. “There will always be another sale,” Ruvio emphasizes.
The article Avoid These 4 Prime Day Pitfalls originally appeared on NerdWallet.
