Wise Holiday Shopping: Deals Just A Start

Everyone likes getting big discounts, especially when shopping for the holidays. That becomes even more important in a tight economy. And in this column, Early Show financial contributor Ray Martin points out that the price front is only one area where you can -- and need to -- do well.
Holiday Shopping and Giving Tips

As consumers confront the dismal news about the economy, rising job losses and the financial market crisis, one thing is clear: Folks are still shopping for the holidays. Even with consumer sentiment falling, sales at the beginning of the holiday shopping season were higher than the previous year. But along with the higher sales are higher levels of anxiety for shoppers.

Fortunately for consumers, retailers seem to be offering more sales and discounts in the stores earlier this season. Many are very worried and are offering earlier and steeper incentives to get shoppers in the spending mood.

In these anxious and uncertain times, it's more important than ever to be a smart shopper. So here's a list of the top questions and concerns on the minds of holiday shoppers this season:

Gift Card Do's and Don'ts

It used to be that the biggest things you had to worry about when giving gift cards were the fees and charges. Now, with the financial crisis affecting so many retailers, a growing number of them are heading from trouble or even bankruptcy, and avoiding gift cards issued by retailers who go out of business is on the minds of many shoppers.

It is estimated that bankruptcies could cause consumers to lose about $100 million this year on gift cards.

So, what happens if you buy a gift card from a major retailer who later files for bankruptcy before you use it?

When Tweeter, the electronics store chain, filed for bankruptcy last month, the court granted permission to continue to redeem gift cards for five days following the bankruptcy filing. If you were unable to redeem your gift card by that date, the only option left is to file a claim with the Bankruptcy Court for the unused portion of your gift card. Maybe you'll get a small settlement, if anything at all.

Even though Circuit City filed for bankruptcy reorganization (which means that they plan to restructure the business and come out of bankruptcy eventually), they are still accepting and issuing new gift cards. The advice here is to use your Circuit City gift card soon and not buy a new Circuit City gift card at this time.

When Linens 'n Things initially filed for bankruptcy and finally shut its doors in October, it was accepting gift cards during liquidation, so it allowed gift card holders a last opportunity to use their Linens and Things gift card.

And the list goes on: Sharper Image, Bennigan's, and Steak and Ale Restaurants, Value City Department Store, Mervyn's Department Store, Steve & Barry's, and Boscov's Department Store have all declared bankruptcy this year.

The bottom line: If you are still holding onto gift cards received in the past, now is the time to use them. Buy gift cards for things the person you give them to will use them for immediately. Also, be careful to only buy gift cards that don't have the security number exposed, or are held in a safe location behind the counter: Thieves can write down gift card numbers and monitor your card online, quickly accessing the card when activated and draining its value by making their purchases before the gift card owner is aware of it.

Finally, check into the gift card fees before you buy. They are typically posted on the gift card sleeve or on the associated Web site. Buy gift cards with no issuance fees, expiration dates or maintenance fees, which can easily be found with gift cards issued directly by retailers. And if you receive a gift card, use it promptly, not only to avoid possible maintenance fees and expiration, but also to take advantage of post-holiday discounts.

Getting Promotions and Coupons for Extra Savings

Power shoppers use this trick to save money: When you are at the point of checkout on the retailer's Web site and you are prompted to enter a coupon or promotional code, it is a signal that there is a special discount available for the product. Before you click "buy," open another browser and search Google by entering the phrase used by the merchant (such as "promotional code") and the name of the merchant - doing this will quickly lead you the codes you need to save you money.

Also, log onto Web sites such as couponcabin.com and fatwallet.com to look up promotion and coupon codes for many retailers and their products - using these codes can qualify you for additional discounts or free shipping on your purchases.