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Are Sales The New Normal?

(CBS)
From cars to clothes, prices have been lowered on virtually everything as the recession has deepened — making the current retail climate a bargain hunter's dream, but a retailer's nightmare.

"Many stores can't protect their brand right now because they have to worry about cash flow," said Gilbert Harrison, the chairman of Financo, an investment bank that specializes in merchandising.

In order to keep this cash flowing — or just trickling in — even high-end stores like Bloomingdale's and Saks Fifth Avenue have offered serious discounts, especially during the holiday season. Shoppers once had to wait months until full-priced items went on sale, but not anymore. And big-ticket items are no exception.

Beth Kobliner, author of "Get A Financial Life," agrees.

"Retailers have been hurt by the economy and are doing everything they can to attract customers," Kobliner explained.

"Five years ago, if you saw zero percent interest on a car loan, you'd think it was a scam," Kobliner added. "Today, there actually are zero percent interest deals, and you don't need good credit to get them."

However, Kobliner warns that what is good for the economy is not always good for an individual's wallet.

"Sales entice you to spend more," she said, "whether it's a blouse or a house."

She said that many people get caught up in the discount and buy more than they need to. "Anything that's on sale for 80 percent off is hard to resist," Kobliner said, "but if you don't need it, you are spending 20 percent more than you would have."

Can full-price luxury make a comeback, now that consumers are almost addicted to sales?

"I certainly hope so," said Harrison.

The problem, he explained, is that retail prices got "ridiculously high" before the recession. Consumers were already feeling ripped off, so when the recession hit, their attitude towards full-priced items easily changed.

"Consumers have seen the bargains," Harrison added, and even when the recession ends "it's going to take much longer to get out of that mindset."