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When is a deal really a deal?

Ways to avoid falling for retail tricks and costly mistakes during the holiday shopping frenzy
When is a deal really a deal? 02:44

Everyone loves a bargain, but a "great" deal could quickly become a "not-so-good" purchase if you allow yourself to get caught up in the holiday shopping frenzy.

Whether it's in stores or online, retailers have been bombarding shoppers this holiday season with sales, coupons and deals.

"It's a bargain hunter's dream because there are so many sales out there," says Mark LoCastro of DealNews.com, one of several websites that searches the Internet for deals.

LoCastro says doing research and knowing the item's price history is key to saving money. "If you know that the iPhone 6 is priced at $199 with a contract and all of a sudden you see a deal for $150, you know you're saving $50 on that product because you know how much it cost originally," LoCastro adds.

However, the staff at online product review sites TheWirecutter.com and TheSweetHome.com looked into more than 71,000 holiday deals offered this year. They found that only 0.6 percent of the deals were actually worth buying.

From steep price drops to limited time offers to combining several discounts at once -- a practice known as "piling" -- retailers use sales and promotions to generate excitement and drive sales.

But it's that kind of excitement shoppers should be wary of, according to Priya Raghubir, a professor of marketing at New York University's Stern School of Business.

"You get drawn by the excitement of the deal and wanting to take advantage of it. It makes you feel like a smart shopper. It makes you happy. It makes you feel like you got more for your money. So, you don't necessarily wonder if it this was really a deal," Raghubir says.

Raghubir cautions against falling for marketing tricks such as limiting quantities or availability of certain items in order to create a sense of urgency.

"Anything which crunches time or crunches the availability of a product is something that consumers then want to exert their independence on... and then,, oh, it's only available now. I better rush and get there before this deal is over," says Raghubir.

To get a good deal, experts say to stay focused on making your purchases.

"If you're going to a store, put your blinders on and just focus on the item that you want. You know you're getting a discount on this item, just buy it and walk away," LoCastro recommends.

Other suggestions to help you from overspending while bargain hunting include comparing prices using online price tracing sites such as CamelCamelCamel.com and Amazon's price checker. Also know what you're getting. Find out if there's a newer version of the item coming out and make sure it has the features you want. Read online reviews from people who've bought the item. And pay in cash to avoid any additional costs like interest charges and fees that often come with credit card purchases.

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