The only place where it might make sense is in high-quality consumer goods like furniture and electronics
Spend more to save more? Yes, as implausible as it sounds, it nicknamed spaving is a thing. So much a thing that its actually a trend.
What started out as a girls shopping binge weekend on TikTok four years ago has turned into a hashtag thats got consumers drooling over the possibilities. But, as some financial experts or consumers whove tried it will tell you, the idea seems inviting, but actually turns out to not make much sense at all.
Like when you spend more to get free shipping, is how financial wiz Renee Vitullo explains the trend in her #spaving TikTox video. However, say shipping is $7. Then, you put a $14 item in your cart, and, then, yeah, you save $7, but youre still down $7!
Spaving shows up a lot in online shopping, but its now ventured further out much further. Grocery stores and retail stores are dusting off things like buy one, get one (BOGO) free and bulk discounts to ride the back of the spaving trend to try and get consumers to purchase items they wouldn't normally buy or if they do, they end up with excess perishable goods that go to waste.
How consumers are getting hurt by spaving
Nonetheless, the spaving gimmick apparently works. According to Numerator, temporary price reductions increased by 72% between March 2023 and March 2024, and overall promotions increased by 15%.
The use of free shipping offers, "buy one, get one free" deals and order minimums is a successful strategy for getting consumers to "spave."
But just like a lot of other consumer-oriented adrenaline rushes that comefrom snagging a good deal, if you take spaving too far, the wake-up call is cold and hard.
Dean Kaplan, CEO of Kaplan Collection Agency, told ConsumerAffairs that approximately 10% of his firms debt collection cases happen due to spaving.
"When it comes to spaving, the key is discernment. Consumers should ask themselves a few critical questions:
- Is this purchase aligned with my long-term financial goals?
- Will the cost truly translate into savings, or is it just an attractive price tag now? "For instance, buying in bulk can be cost-effective for non-perishable items you use regularly, but it becomes wasteful spending when those items go unused, Kaplan said.
Kaplan said that when it comes to spaving, the key is discernment. Yes, good old-fashioned intelligence, wisdom, shrewdness, and common sense.
Consumers should ask themselves a few critical questions, Kaplan suggests. "Doesthis purchase aligns with your long-term financial goals? Will the cost truly translate into savings, or is it just an attractive price tag now?
Where does spaving make sense?
There's two spavingsituations that Kaplan likes best.
For instance, buying in bulk can be cost-effective for non-perishable items you use regularly, but it becomes wasteful spending when those items go unused.
"Similarly, purchasing high-quality appliances might seem like spaving because they promise durability and lower energy costs, but if the technology is more sophisticated than you realistically need, you're just spending more without the payoff."
Kaplans comment about high-quality appliances caught our attention at ConsumerAffairs enough that we asked for more examples of consumer high-end appliance products that fit into the spaving category. Here are a few examples that he gave:
High-Quality Furniture: Expensive couches or dining sets can be more durable, but if trends change quickly or if they require special care that adds to the cost, the long-term savings might not justify the high upfront expense.
Smart Home Devices: Products such as smart thermostats, intelligent lighting systems, and advanced security cameras can offer long-term savings on energy and security, but their benefits may not always justify the upfront costs if basic models meet your needs.
Fitness Equipment: High-end treadmills, stationary bikes, or smart fitness mirrors may promise better features and durability, but they might be overkill if a more affordable option can serve the same purpose for your fitness goals.
High-End Audio Equipment: Premium speakers, headphones, and sound systems may promise superior sound quality, but for most consumers, mid-range options can deliver a satisfactory audio experience.
Luxury Bedding and Furniture: High-thread-count sheets, memory foam mattresses, and ergonomic office chairs provide comfort and durability butit's crucial to evaluate whether the added features justify the price difference from standard options.
Electric Vehicles (EVs): They offer lower running costs and tax incentives, but the initial purchase price is high, and the savings might not cover the difference unless the vehicle is used extensively.
Designer Clothing: High-end clothes can last longer and retain style, but if they are subject to fashion changes or if less expensive alternatives are available, the long-term savings might be minimal.
But, as Kaplan says, discernment is key. "The bottom line is to ensure that any decision to spend more now truly serves a well-considered financial plan and isn't just a reaction to perceived savings," he concluded.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-06-10 11:11:27
