This is part three of our 5-part series for Financial Literacy Month
Ever make a purchase and have regrets afterwards, asking yourself “Why did I buy this?!” Buyer’s remorse affects everyone from time to time, but there are things you can do to prevent yourself from making hasty and regrettable consumer decisions. This is especially important when you are making large purchases.
Here are some tips on being a smart consumer when considering a purchase or service:
Ask yourself if you receiving are good information or a sales pitch
With a surplus of information online, it’s increasingly difficult to discern reliable information from sales promo. Many sources rely on advertising, so before making a purchase, ask yourself—if a magazine receives millions of dollars in advertising from a company, are they likely to give negative reviews of that company’s products? Publications such as Consumer Reports, which accept no advertising, are much more likely to provide unbiased information. Other unbiased tools, such as the Government of Canada’s financial comparison tools, can help you compare a variety of financial products without the sales job.
Check on your cooling-off period
For many contracts, you are legally entitled to a cooling-off period which may range in length of time. For a gym membership in BC, it is within 10 days of receiving your contract. For an RESP group plan contract, the period is 60 days. For a phone contract, it is 14 days and up to 50% of the data usage (one month and 100% of the data usage if you have a disability). Always know what the terms are before signing any contract and hang on to a copy.
Determine the return policies
Buyer’s remorse can be a lot more stressful when you have no return options. Some retailers will go by all sales final (particularly on sale items), whereas other retailers’ return policies will range from 7 to 60 days, with some even offering unlimited returns. Some retailers will offer a cash refund, whereas others will only offer store credit. Know ahead of time and always keep your receipt.
Find out the fees, charges, and penalties
When purchasing a financial service or product, know what the extra charges are: is there a set-up fee? Yearly administrative fee? Penalty for closing your account? Transfer fees? These can all add up and cut into how much of your hard-earned cash you have left. Read the contract carefully—some contracts can contain more clauses than a mall at Christmas. Keep your copy of any contract in a safe place.
What are the motives behind the salesperson’s recommendations?
Ask yourself: is the salesperson selling me this financial product or service because it’s good for me, because it’s going to make them a good commission, or because it’s going to make the company more money? Some financial products are much more profitable than others. Unfortunately, transparency is often lacking, so it is up to you to dig a little deeper to find out. Services such as RESP group plans, credit card balance insurance, and extended warranties are examples of products or services that line the pockets of the companies offering them more than they do the consumer.
Family Services of Greater Vancouver can help you with your financial well-being, including making more informed consumer choices. We have workshops and one-on-one financial coaching to figure out your financial goals and how to achieve them. Email firstname.lastname@example.org or call 604-638-3991 to get in touch with our team and learn more about how we can help you with your financial goals.
Murray Baker is a Financial Facilitator and Coach, Financial Empowerment, with Family Services of Greater Vancouver. He is also a speaker and author of the bestseller The Debt-free Graduate: How to Survive College Without Going Broke, now in its 14th edition.