Thanksgiving is just around the corner, which means the holiday shopping frenzy is about to begin.
To help you navigate through the chaotic shopping season, The Saturday Early Show's financial advisor Ray Martin offered some tips on how to be a safe and smart shopper.
Martin says, finally, the economy is showing signs of growth. Overall, consumers report feeling more positive about their financial situations and retail surveys have found that many shoppers intend to spend more money on holiday gifts this year.
Unfortunately for shoppers, Martin says, there will probably be fewer sales in stores this season. Also, don't expect the major markdowns seen last year. In 2002, shoppers reigned in their spending, leaving retailers with excess holiday inventory, leading to big sales.
This year, many retailers hedged their bets and decided they would risk running out of a popular item instead of having too many in stock.
With more people spending more money on gifts this year, it's more important than ever to be a safe, smart shopper. The following are Martin's tips for doing both:
Evidence from across the country says crime increases during the holiday season. Martin says thieves are smart and they know that consumers are carrying more cash, spending more money and bringing home bags of expensive merchandise.
This is the time of year to take extra caution when shopping. Martin says don't flaunt your money, don't carry around armloads of packages and don't leave packages in a visible spot in your car. In addition to protecting your self, you need to take some steps to protect your finances. Clean out your wallet: When heading to the mall, take only the identification and credit cards you actually need to make your purchases. Leave other cards and personal information at home. That way, if your wallet is stolen, your losses will be smaller.List your accounts: Create a list of every credit/debit/ATM card you will carry with you on your shopping trips. Include each card's account number, expiration date and the phone number listed on the back of the card. Leave this list at home. If you lose your wallet or purse it will be easy to quickly cancel all of your cards and ask for new ones.Keep cards in sight: When you hand your credit card to a clerk to pay for your purchase, keep an eye on it. If a sales person has to "run to the back" or otherwise leave the register, don't let them take your card along. You don't want to run the risk of someone taking an imprint of your card and then using it later.Review account activity: Martin says since you are making more purchases than usual during the holiday season, keep all of your receipts and be sure to match them promptly to your billing statements. If you can access your statements online, you should check on activity more frequently than usual during the next few weeks. Early detection of a problem, such as someone else using your charge card, will stop the criminal and limit your liability. This is a shopper's single best defense against fraudulent charges and identify theft, Martin says.Visit banks for cash: If you must get cash while you're out shopping, use ATMs provided by your bank -- preferably those in the bank's lobby. Avoid stand-alone ATMs. These do not have security cameras and are much more susceptible to being fitted with "skimmers" -- electronic devices that allow thieves to record the account numbers and PINs of unsuspecting users.
Shop smartAsk about refunds: As was widely reported last year, retailers are cracking down on refund and exchange policies. The confusing thing is that every store seems to have a different policy, and often those policies change during the holiday season. Typically, electronic items carry the strictest policies. Martin recommends writing down the name of the sales associate who tells you about a generous exchange policy so that later on, if challenged, you will have the specifics on your side. Also, look for signs posted in the store, and notices on your receipt. Use a credit card: According to Mastercard International, six out of ten banking customers have debit cards, and for the first time debit transactions are set to outpace credit transactions for the year. When doing your holiday shopping, Martin strongly suggests using a credit card instead.
He says many credit cards provide benefits such as requiring merchants to exchange or replace defective or damaged merchandise, protecting against no return policies and extending manufacturers warranty. The warranty is particularly valuable when buying and shipping fragile merchandise such as a digital camera or a DVD player.
Also, you are not well protected from fraudulent charges on a debit card. If your debit card is lost or stolen and a crook racks up charges on it, there's no guarantee that you'll get that money back. With a credit card, you are only liable for $50 worth of fraudulent charges.
Martin warns not to charge yourself into deep holiday debt. When shopping with a debit card, you have to stop spending once your account is empty. He says a credit card requires more restraint. Save on shipping fees: If you need to buy an item online or through a catalog -- because you are mailing it out of town or because the store doesn't have the size or color you need -- many retailers offer free shipping if you place your order at the store. Some retailers have special phones in the store. Pick it up and you are automatically connected to a service representative, who will place your order and ship it for free. At other stores, you can ask a salesperson to place the order for you and it will be shipped for free. Martin says it's worth asking your favorite retailer if they offer this service.