Keep Calm - Antidote to Mega-Monday Headaches
Today is Mega-Monday. Media reports suggest that online retailers expect consumers to spend £222,222 per minute during the biggest ever day of cyber-shopping.
But what will it mean for the thousands who will overspend, racking up credit card bills they cannot repay?
Visa Europe predicts that, on this day alone, people will spend £320 million using its cards for 6.8 million transactions. This represents an increase of 21% on last year.
Amazon has prepared for what it expects to be its biggest ever trading day, by employing an extra 10,000 temporary workers across its handling centres.
Meanwhile, the credit report website Experian expects consumers across the UK to make 115 million visits to retail websites. If that proves correct, it represents a jump of 36% on last year.
In a moribund economy, retailers of all kinds will welcome the boost to their sagging bottom lines. The Chancellor and his team will also welcome the boost to government coffers from VAT attached to most purchases.
For some consumers, however, Mega-Monday will prove to be a moment of madness, where spending out-manoeuvred good sense. Recent years have seen a rise in the number of charities devoted to helping the financially over-extended. Mega-Monday will likely drive more business to their doors, too.
According to Credit Action, a charity devoted to educating people about debt, outstanding unsecured consumer debt stood at £158 billion at the end of September.
Shopping online is convenient and arguably more and more people are using it as their first-stop option rather than a back-up for buying on the high street. It need not be a budget-breaking exercise, if certain basic guidelines are kept in mind. Here are a few that may help make your online shopping experience less stressful:
Part of the fun of Christmas shopping is the spontaneity involved, but you need to set limits for it if you’re going to avoid overspending. Knowing, before you go online, basically what type of gifts you want to buy will keep you on track. You may not know exactly which cookbook you want for Aunt Jane, but having made the cookbook decision already provides useful boundaries and may stop you getting sidetracked by ‘special offers’.
Who exactly are you shopping for? Make a list of those you’re committed to buying gifts for and try to stick to it. Mentally, you will naturally prioritise people in terms of the size of the gift, but don’t then start playing catch-up. The ‘cocktail party phenomenon’ has people in crowded spaces talking louder and louder in order to be heard over the rising ambient noise. The same type of thing can happen when you shop online: you end up backtracking, adding to your purchases for any one person simply because, along the way, you’ve spent more on someone else.
- Nominate a Card
Many people overspend with online shopping because they don’t decide in advance which credit or debit card to use. Cards vary widely in terms of the conditions attached to them. Is there a limit on any given card? What is its interest rate? Do you have an overdraft on a card that is attached a bank account? Know the cards in your wallet or purse and try to choose one card for online shopping – the one with the lowest limit and the lowest interest rate.
- Keep Calm
Overspending is easier when you are in a hurry to buy. When shopping online, it pays – literally – to find a time and space that lends itself to cool-headedness. Wise purchases are the result of comparing prices across various sites. You may not save huge amounts on any one purchase but, as a well-known supermarket brand keeps reminding us, ‘every little helps’. When comparing prices across websites, make sure you factor in delivery costs and the terms of delivery. These tend to vary from store to store and can push the price up considerably – or leave you waiting for a gift that doesn’t arrive in time.
- Swim Clear of Hooks
Impulse buying is one of the major causes of credit card debt, which often spirals out of control as people use one piece of plastic to pay off another. When shopping online, you are surrounded, as you would be in a physical store, with glittering advertisements about a wide variety of new and exciting products. In the online environment, however, the ads are often much more inviting and interactive. Stay focused on what you came to buy. Don’t be distracted. Marketers are paid to lure you in; you are not paid to take the bait!
- Back up
For one-off larger purchases, or a number of smaller purchases in one basket, it pays to print a paper or, preferably, PDF copy of the final order summary. This normally appears on screen just after you’ve paid for your purchases. Most merchants acknowledge a sale with an automated message; it tells you that they will email a confirmation. As with all things email, however, these missives sometimes get lost in cyberspace. You need proof of your purchase in case the product doesn’t arrive, or is damaged. A PDF copy stored on your hard drive, or in your cloud account, is a useful reference should you need it.
- Don’t Monetise Affection
In my new book Fascinating Times, I ask whether we cheapen some things by attaching a monetary value to them. In a world where more and more human activities are being transformed into marketable commodities, it pays to step back and ask, ‘Where is the real value here?’ Truly memorable and meaningful moments in life often cannot be measured in financial terms. Don’t put a monetary value on the affection you feel toward friends and family members. In a very real sense, it is the thought that counts. A gift that is tastefully selected, with a keen awareness of the recipient’s interests, is more valuable that one that simply has a high price tag. (And a gift that the recipient suspects may be beyond your means, sometimes produces guilt in the receiver.)
- Concentrate Your Efforts
If you spread your online Christmas shopping over too many sessions, you make yourself vulnerable to wayward spending. It becomes harder to keep track of how much you’ve spent, on whom, if you shop in short bursts. Buying everything in one marathon session isn’t necessarily the answer, either, as you may end up making bad decisions when tired. Try to concentrate your shopping on a few sessions at most, though – concentration now might save you from exasperation when you get your credit card bill.
- Remember: It’s Not About Me
Buying online is often fun, but for some folks it becomes a little too much of a good thing. While shopping for gifts, they see things they wouldn’t mind buying for themselves. This is, of course, common to all gift-giving, on- or offline. With the cyber-shopping experience, though, there are no heavy bags to be carried home; it’s easy to click a button in your online basket, changing a ‘1’ to a ‘2’. Be focused on shopping only for other people. Leave your personal shopping for another time – preferably well after Christmas.
- Don’t Shop Competitively
Often lurking in the back of our weary minds when we shop for gifts is the notion that we must match the spending of others. We imagine Grandma opening her gift on Christmas morning and unwittingly comparing it, unfavourably, to something she has received from others. But while comparisons may be natural, if unconscious, there is no competition in the Christmas gift stakes. We don’t need to outspend anyone else. Seasonal giving is about deepening relationships, not competing in a race. If you must compete, find other ways to do it – perhaps by showing kindness in good deeds that don’t involve spending.
You don’t have to be an all-out Scrooge to recognise that there is a lot of ‘humbug’ associated with Christmas these days. Why not simplify your approach and let this be a season of good will and a smaller bill?
Hear Mal's BBC Radio interview on this issue: click here.
Download Mal Fletcher's NEW Book Fascinating Times, now available worldwide on Amazon Kindle. (You don't need a Kindle to read it!)