Is a Black Friday Deal Really a Deal?

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I awoke today to find over 100 emails in my inbox advertising Black Friday. This goes with the over 100 I have received over the course of the week preceding the day. I deleted most all of them without opening them, and had a look at a couple, which ended up being deleted. This raises the question about whether these deals really are deals?

The concept of Black Friday is not that it is the day after American Thanksgiving, but that it is the first day in the calendar year when retailers are “in the black”. For many retailers, the early months of the year are lossy months with costs outstripping revenues in the hope that things will reverse closer to the holiday shopping season. Some smart marketers used the fact that many Americans are off work the day after Thanksgiving and elected to create selling events to pull spending forward ahead of the Christmas frenzy.

It worked. Per capita debt went through the roof, and people started spending more money that they did not actually have and ended up buying stuff that they did not necessarily need because it was a “deal”.

Is it really a deal? Sometimes, but having done some limited research, I find very little considerably less expensive on Black Friday than it was in the last “big sale”. The exception, like Boxing Day sales looks to be primarily goods that are end of life, have been superseded by a newer version, or are about to be superseded by a newer version. This is a method of inventory management and if it works out well for the buyer and the seller, that’s great.

Sadly these are the exceptions not the rules, and the Black Friday deal is all about separating us from our money earlier in the holiday shopping season and creates the (proven successful) opportunity to sell more over a longer buying period, basically creating a shopping boom from American Thanksgiving to New Years Day.

The question is whether you are actually getting a better deal? The numbers say not really. In fact, you may spend more than you would have before because of the power of the marketing methodology called scarcity. Time limited offer, supplies are limited, first come first served, first 100 customers only are all scarcity plays. Sometimes they are true. More often than not they are not.

Sellers do not want to piss off customers so the price you see today is likely to be the price right through Christmas. The urgency is often a fake. No one is forcing you to shop or spend more, but you may be getting hooked without a real reward so ask yourself.

If the goal of Black Friday is to be in the black, how big a discount can you really expect? Will a seller sell below their burdened cost? They might to clear old otherwise difficult to sell inventory, but the new hottie is not likely to see a big discount.

Moreover many manufacturers engage in what is called MAP pricing. This stands for Minimum Advertised Price, where a vendor who advertises below MAP will be penalized for doing so in the form of fines or limited access to inventory. Any time you see an ad that says call for price or come in for price, you have found a seller trying to get around MAP rules.

If MAP sounds like price fixing to you, you are right, it is absolutely price fixing, but none of the consumer protection agencies have done anything to stop it. Your elected officials, doing nothing, same as usual.

If you are thrilled with your Black Friday purchase, good for you. The other question to ask is if you spent money before you needed to, and what the cost to you of doing so is?