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4 Ways Store Perks Entice You to Overspend

Learn to recognize and avoid retailers’ costly traps.

Retailers are notorious for finding clever ways to separate you from your hard-earned money. Many of these tactics, at first glance, seem completely harmless. After all, who doesn't like free shipping, or an awesome return policy? But it's not until we dig a little deeper into the motivation as to why these "perks" are offered, that we see the real reasoning. Here are a few of these so-called "perks" and how we can avoid the retail traps.

See Also on Kiplinger: 10 Secrets to Shopping at Costco

Liberal Return Policies

Have you ever been in a store, trying to decide on a purchase, and told yourself you'll go ahead and buy it and just return it later if you don't use it? If you have, you're in the same boat as 91% of Americans who factor in the store's return policy when making a purchase. But what you probably don't know is the store is banking on you making this decision and often has a liberal return policy in place to help sway your buying decision.

The fact of the matter is stores use their return policies as a way to pad their bottom-line because they know a percentage of shoppers won't ever bother to return the item. Instead, they'll keep it lying around, with a bunch of other stuff they don't need. The evidence even shows that the longer return window a store gives, the less likely we are to return the item. We tend to get attached to it, forget we even have it, or use good ol' procrastination to tell ourselves we have plenty of time to return it.

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So the next time you're standing in the aisle ciphering over a significant purchase, don't let the store's return policy trick you into making the purchase. Instead, make the decision based solely on need and a competitive price. If you use a liberal return policy as the deciding factor, be aware you're playing right into the retailer's hand.

The Psychology of Free Shipping

Online retailers know free shipping is a big deal for shoppers. Approximately 96% of online shoppers are more likely to shop on a website that offers free delivery. But don't let free shipping blind you to other important factors you should consider. Namely the price of the item, how costly it might be to return the item, and the reputation of the website. In other words, don't let the attractiveness of free shipping keep you from doing a quick price comparison with an app like ShopSavvy. After all, free shipping isn't that big of a deal if a competing retailer has a better price, even when factoring in shipping costs.

Attractive Rebate Offers

When I worked in the paint department at The Home Depot, we periodically had a "rebate weekend" where you got $5 back on a gallon of paint and $20 back on five gallons. But the rebate wasn't instant — it required you to mail in your receipt and wait for the rebate check to show up in the mail a few weeks later. You wouldn't believe the number of repeat customers I'd talk to that would buy paint with every intention of mailing-in the rebate, but would fail to do so.

Rebates are still in the "snail mail" stone age. This is for a reason — retailers want to make them as difficult as possible to redeem so shoppers will put them in the desk drawer and forget about them. And guess what? It works. Redemption rates hover in the 40%–50% range depending on the size of the rebate.

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The takeaway here is to always mail in the rebate as quickly as possible. The longer you wait, the more likely you are to not take the time to get your money. I strongly recommend keeping the rebate in your bill pile and fill it out the next time you sit down to pay your monthly bills.

See Also on Kiplinger: Mannequin Eye Contact and 7 Other Ways Retailers Get Us to Spend More

"Cheap" Add-On Items

Just the other day, I was purchasing a workout program online and was happy to see it would only cost me $39.99 for several DVDs and a meal planning guide. Then when I was checking out, the site kept promoting these add-on products before they would let me get to the actual checkout page. Having only paid $40 for the program, I found myself intrigued and ended up spending another $30 for a bonus DVD, water bottle, and a couple cool trinkets.

After I finished my purchase and was reviewing my order, I realized that I had played right into their hands. They offered a product for less than what I expected to pay, then persuaded me into buying some relatively expensive add-on items that do nothing but pad the store's bottom-line. You see this technique done all the time with infomercials and most recently with Amazon, which forces Prime customers to bundle purchases that include add-on items. Buyer beware.

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This article is from Kyle James of Wise Bread, an award-winning personal finance and credit card comparison website.

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This article is from Wise Bread, not the Kiplinger editorial staff.