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Loss leaders and introductory offers #thrifty

We have to be quite shrewd these days if we are going to save money. Supermarkets and other retailers have all sorts of tricks to relieve us of our money. The loss leader is a product that they will advertise at a much lower price then their competitors and then make their profit on the lines that aren’t advertised. These offers have to appeal to a large number of people so they can’t be on lines that we only buy infrequently. They have to be on products that most people buy regularly. So sugar is a good product for a loss leader and staples like potatoes and bread can also be put on offer. Some offers will be on products that they have a good profit margin on that they can afford to cut and still make a profit, as well. Loss leaders can be a good bargain but there is always a catch.

loss leaders

Introductory offers

Introductory offers can offer us a big discount on things like car insurance and energy costs but then there is a big price increase the next year. You can save as much as 50% by switching your car insurer but in the following years they will try to  increase the price to make their profit. The answer is to switch again but that takes time and the insurers are aware of that. They often have Freephone numbers for claims but the customer services will be on a 0845 number and you find yourself in a queue and it takes an hour to switch your insurance. This industry wide practice of bad service is really unacceptable. This is another mechanism similar to the loss leader which can save us money but in the long term can cost us money.

Buy one get one free

The buy one get one free offers have largely gone out of fashion but you still get the ‘buy 3 for £10’ offers that can lead to us wasting food. Supermarkets also offer larger packs than we actually need which leads to waste. If the offer is going to lead to waste then it can be more thrifty to just buy one. I tend to take advantage of these offers when I can buy three and freeze two.

Loss leaders

It is mostly supermarkets that use loss leaders but watch out for them in other forms at travel agents and on the glossy leaflets put out by travel companies. If the holiday looks great and is a low price then read the small print. There is often a catch or some problem with these loss leaders that we only find out when we come to book and then we change our mind and buy a more expensive holiday.

Finance

Finance is sold with introductory offers too, such as balance transfer offers on store cards and credit cards. It can be a good idea to use a balance transfer to reduce your finance costs but be aware of the long term implications. Easy finance is often offered by car dealers on high mileage cars too. If you arrange your own finance, the cost can be lower and you can then choose a low mileage car.

That’s all today’s money saving ideas. If you would like to follow this blog just enter your email address at the top of the sidebar or follow me on Twitter for updates. You can also find links on my Facebook page.

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