Another Pitfall of Hard Economic Times

by Debbie Vasen | More from this Blogger

12 May 2008 11:02 AM

In addition to the risk of your gift cards becoming worthless, another consideration must be taken when shopping during tougher economic times. This is to remember that no matter how big or impressive a retailer is, they still can go under.

What does this mean for you? Be careful of buying anything into the future. Certainly, a gift card is one example of buying into the future. So are gift certificates. These are actually samples of unsecured loans. You are giving the retailer a loan for your future purchase. If they go bankrupt, typically unsecured loans only receive a payback of pennies on the dollar.

Really, anything where you pay today for something you will receive in the future is at risk. Unfortunately, you simply can't completely trust all is going to go smoothly, even with large name brands.

Further examples include:

1. Service agreements - Is that salesman pushing you to buy an extended warranty or a special prepaid service agreement? If the contract is with the retailer, and they go out of business... then so does the warranty or services. Most often these types of additional costs should be avoided, but if you really feel the need to purchase one - during hard economic times, make sure the agreement is with a third party (not the actual retailer).

2. Layaway - This can be really scary! If you start paying for an expensive item and the company goes out of business, you could potentially loose all the money you have invested towards your layaway plan - and still never receive the item.

3. Paying cash for goods that take a long time to deliver - Don't pay for a product you haven't received. If you must go this route, then at least put it on credit. A credit card will protect you if the item is never delivered by refusing to pay the merchant.

Related Articles:

*Use those Gift Cards

*Shopping at Discount

*The Media and Your Money

Learn more about Debbie Vasen

Debbie Vasen is a published web content editor and writer, as well as a freelance writer for various print publications. In addition to blogging at Families.

View Full Profile | More from this Blogger