Thursday, May 15, 2014

The Wal-Mart Trap

Bargain hunters beware!

Though Wal-Mart has great prices on certain items, they're not always the cheapest option around. They built a very successful business based on advertising their low prices, and then having such a wide selection that people don't bother to go anywhere else for their other goods.

A prime example is groceries. Wal-Mart's prices are typically higher than those of grocery stores. For the items that are cheaper, take a look at the ounces: the package likely contains less product. 

Another example is computers: Wal-Mart often charges relatively high prices for relatively poor machines. When I see $400 for a computer with a low-end Celeron processor, I cringe (see for an example. This is a slow computer; I could get a similar one elsewhere for less than $300). 

I spent that same $400--shipping included--on Amazon for the computer I'm using now, which sports a much faster processor and is made by a well-respected manufacturer that I've had good experiences with. I got mine used, because I've adopted the Millionaire Mindset--so I don't think I have to have the newest stuff. Refurbished electronics can save you a ton on quality merchandise, especially if you buy online!  

Don't get me wrong; Wal-Mart does have good prices on lots of items. I go there once a month for my phone card, and I look around while I'm there. Sometimes a good sale is going on, or sometimes a product is just offered for a lower price than it is elsewhere. Wal-Mart does have some good prices--but you kinda have to know how much the same item costs elsewhere, lest you get tricked by advertising and "creative" pricing schemes. 

But since people know Wal-Mart as a store with cheap stuff (primarily thanks to long-running, well-funded, and effective advertising campaigns), people just tend to run there on autopilot without checking around for lower prices first.  

This is not a good habit, whether you're running to Wal-Mart or any other store. Check around, particularly since prices are frequently advertised on a store's webpage. Wal-Mart and many other stores also offer price-match guarantees, so that they'll match a competitor's lower price: a clever strategy to keep your business. I encourage you to take advantage of this offer as well. 

Loyalty to a particular retailer saves you time, but isn't always the best decision. If you want to go to a store to get something you need right now, or something so cheap that shopping around would save you only a few pennies, relying on loyalty makes sense and saves you a lot of time and effort that could be better used elsewhere. 

But for big-ticket items especially, or items you need on a regular basis (groceries, toiletries, etc.), you'll be better served to check around. Sometimes, Wal-Mart's price really is lower. But sometimes it isn't. You'll never know which is the case without knowing what other retailers charge. 

The point here is not to believe the marketing hype. There is no shortcut to knowing your prices. Try to find a few stores that serve a variety of needs, and do a little research on things you may need to buy in the future.  When it's time to actually buy something and you already know where to go to get the best deal, your wallet will thank you!