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"Dollar Signs": How To Stay Out Of Debt During Holiday Season
Aired November 22, 2003 - 16:31 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CATHERINE CALLAWAY, CN ANCHOR: Well, welcome to "Dollar Signs," everyone, where we help you make the most of your cash. With next Friday kicking off the holiday shopping season, we want to give you some tips on how to stay out of debt, but still get all of those names crossed off of your gift list.
We have a couple of people to help us out today. Todd Mark of Consumer Credit Counseling Services of Atlanta. And Scott Crugman with National Retail Federation in Washington.
And Scott, we're going to get back to you in just a minute. First let's check in with you, Todd, and get tips on things we should do to plan for our holiday shopping. I know one of the first things you say, Todd, is make a budget and stick to it.
TODD MARK, CONSUMER CREDID COUNSELING SERVICES: Absolutely. The most important thing to do is look at what you spent last year and are you going to be able to afford to do this year? Hopefully, people have been saving all year long so they've got money to pay for all their expenses right now for the holidays.
But if not, here's what you got to do. Make a budget of what you can spend right now for the holidays whatever you're comfortable with. I want you to make a list of everyone you're shopping for. Mom, dad, Uncle Jay, grandma, grandpa, wife, daughter, boss, everybody. Put their names down there, then put a dollar amount on how much you're going to spend for every person.
The trick is sticking to it once you've got that plan put forward. Then, of course, you've got to make sure you can manage that debt. Obviously, we'd love it if people could pay off everything once the bills come in January. But obviously, not everyone can do that. So, we'd like to urge you to try to pay it off within three to four months.
Last thing we don't want you to see is your paying your holiday bills for 2003 at the holidays of 2004.
CALLAWAY: You know, is there a rule of -- a good rule of thumb on how much you should spend on the holidays per your budget or per your income?
MARK: Well, Catherine, you know there's so many surveys that are out right now saying $800 is the average, $1,000, $1,200. It truly is going to depend on the individual or the couple with their income situation and what their debt level is. If somebody's going to be spending $1,200 this holiday season and they already have $20,000 in credit card debt that they're carrying, then you're just accumulating and accumulating, and you're never going to be able to reduce your debt.
On the other hand, if you've got cards that are completely empty and you want to put some things on and you know you can pay them off in a couple months, I don't think there's anything to worry about.
CALLAWAY: There's other things to worry about too besides gifts: gift wrapping, mailing gifts, and it gets expensive.
MARK: And you know what people forget at the holidays? Travel. How many times you go home to see mom and dad, you forget about the airline tickets, hotel, gas if you're driving, meals that you wouldn't ordinarily pay for. So, there's so much more than the stamps for holiday cards, gift wrapping, ribbons, bows and tape.
CALLAWAY: One more question. It's so tempting to use those credit cards, whether it be a credit card company or store credit card. Do you advise, if you don't have the cash, not to use the credit cards?
MARK: Well, as long as you've got a promise to yourself that you're going to pay off your bills within three to four months. Again, Catherine, I'd love it if everybody had cash and they paid for everything in cash, because that way you can't overspend what you have. But as long as you've got a promise and you say, well, three to four months, I can do it, that's the trick.
Now, if people don't have the discipline and they've already got debt on their credit cards, you know what I'd say? Maybe you've got to reevaluate what you're spending and what sort of gifts you're giving.
CALLAWAY: Let's go, if we can, quickly to Scott Krugman, who is with the National Retail Federation in Washington. Scott, my biggest question to you is what kind of year are we going to have this season? What kind of season is it going to be? We've heard all the bad numbers. What do you think's going to happen?
SCOTT KRUGMAN, NATL. RETAIL FEDERATION: It's been a tough couple of years for retail, no one will argue that. However, the second half of this year has been pretty strong. We're actually expecting a pretty solid holiday season, about a 5.7 percent increase over last year. That would translate into about $217 billion into the economy.
CALLAWAY: What about discount retailers versus, say, the high end retailers? Are you going to see a difference there? Are people going to -- this year, because so many of us have smaller budgets this year. Are you going to see more Christmas purchases made there?
KRUGMAN: Hey, consumers are price conscious right now. Who can blame them? The good news, really, though, is all retailers are trying to be discounters. Discount retailers do have a certain inherent advantage in a weaker economic period, but according to our survey, consumers are going to be taking advantage of all shopping channels. They'll be going to discounters, they'll going to department stores, specialty stores -- excuse me. And, of course, shopping online.
CALLAWAY: And these high end stores are not going to let these shoppers pass them by. Certainly, they're going to be gouging some prices for them.
KRUGMAN: The bargains are starting right now. You'd be pretty hard pressed not walk into any store and not see a good 20, even 30 percent off sign.
CALLAWAY: Do you think we're going to see discounts all the way around even in the discount stores?
KRUGMAN: You're definitely going to see a promotional environment. It might not be as drastic as last year where a lot of unplanned markdowns were implemented to clear merchandise.
CALLAWAY: There really were a lot.
KRUGMAN: Retailers have done a good job of keeping their inventories leaner. But there is a catch, that means consumers need to shop probably now. They shouldn't wait until the last possible minute to get the best possible price, because they're going to have to make some compromises in some of the gifts they do purchase.
CALLAWAY: So you're saying some of the best buys may be at the beginning of the season and not closer to Christmas?
KRUGMAN: You've got to have a value equation. Know how much you're going to pay but know exactly what it is you're going to buy. If you see that must-have item that's off the shelves really quickly and you see it, buy it now.
CALLAWAY: All right, Todd, Mark, stay with us. We're going to be right back to take your questions. We have phone calls and e-mails coming up in "Dollar Signs." Of course, you can still send in your e- mail and call us too. Here's our phone number 1-800-807-2620. We'll be right back.
(COMMERCIAL BREAK)
CALLAWAY: Welcome back, everyone, to "Dollar Signs." We're talking about how you can make it through the holiday season without breaking the bank. We have Todd Mark of Consumer Credit Counseling Service. We also have todd Scott Krugman. He's with the National Retail Federation. They're sharing their expertise. Thanks for joining us today gentlemen.
We already have some e-mails for you. This is from Sam in Rochester. Scott, I'm going to start with you. You can answer this one. He says, "aside from black Friday is there any other day/period where shoppers can expect good deals?"
KRUGMAN: Throughout the holiday season they will. The closer you get to the end of the holiday season, you're going to get the best buys. Retailers are then at that point, ready to clear out. Your best bargains are going to come a week after Christmas, where 10 percent of holiday sales are done.
CALLAWAY: All right. Chris it on the line with us from Massachusetts. Hello, Chris. What's your question?
CALLER: Hi, guys. I'd like to buy some stock options as a gift, like 45 million in options Dick Cheney had in Halliburton or the 4 million Michael Powell, the head of the FCC, made overseeing the AOL/Time Warner deal.
CALLAWAY: Let's move on. Yes, let's move on. We have another e-mail. This one is from Jefferson, and he says, "All my friends think that I'm notoriously cheap, but I believe, why pay more for the same goods. How can I get impressive gifts without breaking my budget?" And you, that's a good question. Sometimes you feel guilty, Todd, when you buy things that are on sale to give as a gift. Should we?
MARK: Well, absolutely not. You want to maximize your dollar. And Scott just talked about it, being a smart consumer here at the holidays is the most important thing. If you've got a budget of $800, but you can buy $900 worth of goods for the same $800, that's a great deal.
And when you're shopping around and looking at the fliers, you will see deals that one week will be there and not the next week. So, know the price point that you want to purchase goods at.
But at the same time, Jefferson, you should know there's so many great gifts that you can give that aren't going to cost a thing. Maybe you make a little, you print out a note from your computer that says I promise you a night of baby-sitting, or I'm going to clean the house. I'm going to get the car washed. I'm going to make a homemade meal. You know what that costs? Nothing except unconditional time on your behalf.
CALLAWAY: I'll take all of those.
MARK: I love gifts like that. And they come from the heart. They mean a lot more than a blouse or a tie.
CALLAWAY: Scott, do you have anything to add to that?
KRUGMAN: I think that's a great point. I wouldn't be concerned so much with what the item costs. It's the holiday season. And as they say, it's the thought that counts.
CALLAWAY: Let's try the phone lines again, shall we? Let's see if we can get a serious shopper on the line. We have Stephanie from Georgia. Hello, Stephanie, do you have a question?
CALLER: I actually called in with a tip. I really like your money saving ideas, and another inexpensive idea is most people do not use the grocery coupons that come in the Sunday paper. And if you're one of those people who usually throws those away, a very generous gift to a friend or a family member, who uses grocery coupons, is to give them a certificate and tell them you'll be giving them your grocery coupons all year long. That gift is worth about a thousand dollars for grocery coupons.
CALLAWAY: Stephanie, are you talking about cutting them out for the person? I would love that.
CALLER: Not cutting them out. That's a lot of work. I wouldn't expect that. You can just -- I'm a coupon user, and my friends give me their coupons not cut out. Just the whole flyer from the Sunday paper, and that saves me an extra thousand dollars a year when people give those to me. So, if you have a friend who uses grocery coupons and you don't use yours, it's a really generous way to help them out.
CALLAWAY: Thank you, Stephanie. I'm sure you like that idea, Todd.
MARK: Wow. Coupons all year round. That's a great idea. Again, that goes back to being a smart shopper.
CALLAWAY: Let's go now to Liz for another e-mail. "Why doesn't everyone shop by catalogue or the Internet?"
You know, do you think that's going to be used a lot this season, Scott?
KRUGMAN: We are seeing more and more usage of the Internet and of catalogs. As people get more comfortable with the technology, there's more broadband. The thing is, though, people still want to get out to the stores. They want to touch and feel the merchandise.
What retailers are doing are trying to integrate all the channels together. You can buy online or pick up in the store. Or buy online and return the merchandise to the store. They want to make it as convenient as possible for the consumer.
CALLAWAY: Scott, let me ask you about the hot items. Are we going to see a couple of those? We do every season, I don't know why I'm asking that. I know we will. Will there be as many this year, you think?
KRUGMAN: That's a great question. We haven't seen the hot toy emerge. There seems to be no new game consoles, like an Xbox or a Playstation. What's hot right now it appears to be are those digital camera phones. They might actually be more popular this year than digital cameras themselves.
CALLAWAY: Really? A digital camera? Todd, any ideas on how we can all afford a digital camera? Those are the kind of gifts everybody wants. I know you said you were going to buy a DVD finally this year.
MARK: I'm a late adapter. So, I'm the last person in America who doesn't have a DVD player. I know I'm getting one. I asked for all my holiday gifts to be DVDs. What's interesting is that I've been pricing the DVDs I want. I've been telling people I want you to get this at this store, this at that store, and this online. It all goes back to being a smart consumer. If you want to give a list to people of what you want, find the best price for these things.
CALLAWAY: Shop around, right?
MARK: I'm all DVD this year.
CALLAWAY: I love it when a family member tells me what they want and tells me where they've seen it advertised at a really great price. That's another gift you can give to somebody is tell them where to get it.
KRUGMAN: Hey, Catherine, I just want to mention I just bought a DVD player for $38. I want him to be proud of me.
CALLAWAY: I think he his.
MARK: And Scott, what do you think the low price on DVDs is going to be on black Friday? Could it reach $30? $25?
CALLAWAY: For a DVD player, from the low end technology, where you just need it to play, you're definitely going to be able to find one for $40 easily. Depending on what type of quality people want, they'll go up in price from there.
CALLAWAY: And DVD cameras -- and digital cameras are actually going to be very popular this year. Think we'll see good sales on those?
KRUGMAN: Definitely see good sales on those. Again, how good you want the quality depends on how much it's going to cost. You can get a really nice practical digital camera for under a hundred bucks now.
CALLAWAY: All right. We have a phone call. Kathy from Georgia, I believe. Are you there?
CALLER: Yes, I am.
CALLAWAY: What is your question?
CALLER: My question is for Todd. Todd, the holidays are over. We've spent all this money, we used our credit cards. How do we know to go to a company like yours, like CCCS? What are the signs?
MARK: Well, if you're overwhelmed and afraid of opening up your bills in January or say it's Christmas morning or it's Hanukkah night and you've got all these gifts, and you say, you know, I know I could have afforded what I bought or what my spouse bought or the rest of my family bought. Those are signs you're in trouble.
If you open up the bills and say there's no way we can pay off the bills this month. We might not be able to pay the minimums. That's when it's time to sit down with a certified Consumer Credit Counselor Sevice. They'll sit down and review your budget, go over your income, your monthly expenses, and look at your debts and see how quickly you can get those things paid off.
CALLAWAY: You know, Scott, it is a bad habit of going to the stores during the holiday season and being lured in and, you know, those things look so beautiful and those beautiful packages, and you want to spend the money. What about shopping on the Internet? Shopping in the catalog? It takes a while for the gifts to get there. It's hard for consumers to wait.
KRUGMAN: It is. Especially when you're buying for yourself. Our advice, when shopping online is know the shipment dates. Every online retailer or just about every one will post the last day you should buy and expect it before Christmas. So definitely look at the Web sites, look at the policies, look at their shipping options, and you should actually be okay this holiday season.
CALLAWAY: All right, we have a question from Lisa. "I would like to buy my husband a drill, as this is what he needs to finish the things that he started." And apparently has not finished. "How much should I pay for one without going overboard?"
I'm not -- a little concerned about this question. There are so many different types of drills, but I'm assuming it's the basic handheld drill. How do you go about -- this is a good question -- how do you go about finding an item like that? How do you go about searching the retail industry to find the best buy for one of those?
MARK: Lisa, I'll recommend a couple things for you to do. First off, go through the Sunday flyers. If it's something like a drill, I would think the home supply stores like a Home Depot or Lowes, look at their flyers and then go online.
Maybe check out "Consumer Reports" and see if they've done a review of the drills in the industry. They'll break it off by quality and by price. Then you'll know the baseline that you should be looking for an item like that.
Also, make sure you ask your husband if he's really wanting a drill, maybe there's a special one with all these great gadgets and features, and he'll be disappointed if he doesn't get that very drill.
CALLAWAY: Scott, any suggestions?
KRUGMAN: I think those points are great. The best thing about the Internet, it's made a lot of consumers smart shoppers. There's plenty of Web sites out there where you can do price comparisons, like shopping.com, for example. Once you find the best price, go to the store. Or even use eBay. There's a lot of people out there with the same merchandise that they want to sell that's new or like new.
CALLAWAY: All right. Todd, Scott, stay with us. We'll be right back, everyone with more of your emails and phone calls. Stay with us.
(COMMERCIAL BREAK)
CALLAWAY: Welcome back to "Dollar Signs." Todd Mark of Consumer Credit Counseling Service, Scott Krugman with the National Retail Federation taking your calls and e-mails, telling us about how to get the best holiday gifts.
I'm still not over this $30 DVD player you say you've found. I don't see those anywhere. On the telephone now, we have Genevieve from Florida who has a question for us -- Genevieve.
CALLER: One of the things I would like to say is I don't want anything that I have to wash or dust anymore. So I told my children last year about that. So they gave me oil changes for my car. They gave me a year's subscription to the newspaper. And this year, they're giving me a new kitchen floor. That's all I want. You know, I can get all kinds of things. I'm a mother, a grandmother, and a great grandmother.
CALLAWAY: You know, that's a great idea Genevieve. Scott, Todd, it's tough to get out of your family members what they really want. They always say, oh, don't get me anything, and then you end up trying to guess what they want. But it's those practical things that can really help you out -- Todd.
MARK: Well, Genevieve, I'm so proud of you to be able to communicate with your kids what you really want. And those are practical gifts that you can use year round. It's going to mean a lot more to you when you're walking around on that new kitchen floor. So that is just fantastic.
And, Catherine, if you feel that people aren't talking about things like this, talk with your spouse, talk with your parents or kids about what you want and what they want. So that way, you're not wasting your time and your money on gifts that aren't going to mean a lot for the rest of the year.
CALLAWAY: Hey, Scott, the retail association is there to help you. Some of these retailers love it when you buy gift certificates and things like that at some of these home repair centers, you know, new floor. There for you if you want it. Right?
KRUGMAN: Gift cards are the latest craze. And we think they're going to be more popular than ever this year. We actually just conducted a survey and we found out that more than 70 percent of consumers are going to be giving gift cards this year, and what a great way for the person that has everything to give them something for their favorite store or for the category that they like to buy the most.
CALLAWAY: And they get to pick it out as well. Mitchell's on the line with us. Hello, Mitchell, do you have a question?
CALLER: Oh, yes. I just can't believe you just said that because I'm a consumer. No, don't do that. I don't know if you know that, but gift cards have an expiration date. CALLAWAY: That's a good question. Do they have an expiration date? It seems to me that as long as you have that gift card, it should never expire.
KRUGMAN: I'm glad he asked that question because there is something important that consumers know. Gift certificates used to have an expiration date. 12 months, you couldn't use it. What gift cards have is something called a dormant fee. If you go a year without using it or 12 or 18 months without using it, $1.50 is deducted. Retailers are charged are $1.50 by the third party group that implements the technology, and it's a charge that passes on to consumers. We find, though, that 98 percent of consumers use their gift card to the full value.
CALLAWAY: Do they really? Are there different laws on the books in different states on how gift cards should be used or can be used?
KRUGMAN: There are different laws. The important thing to know here though, is a retailer does not book a sale until after the gift card has actually been redeemed for merchandise. When they sell the gift card, it doesn't count as a sale. And they cannot count it as a sale on their books, again, until it's redeemed.
And in some states, they have certain things called the sheet laws, where the states can then claim that money for themselves if the gift card's not used and no merchandise has been exchanged.
CALLAAWY: Hey, Todd, are you still on the line with us?
MARK: Oh, yes, absolutely. Catherine, the only thing I would add on gift certificates or gift cards is make sure you're not buying a gift card or certificate for a store that might not be around a couple of months after the holidays.
Suddenly, you've taken your cash and turned it into a certificate or card that's worthless. Make sure it's not only something that the person you're giving it to really wants or a place they want to shop at, but make sure that place is going to be around after the holidays.
CALLAWAY: I knew you had plenty to say, because I saw you in the box nodding your head furious to everything he had to say. Let's go to an e-mail from Sam. "What do you think about the sales of plasma televisions? Will they rise during the holiday shopping season?" Let's start with you, Todd.
MARK: Well, I've already revealed to you I'm a late adapter. I'm waiting for those prices to come down at least another thousand or so. I think just as we've seen DVDs over the last three years drop dramatically in price, if you can hold off for a few more years for the fantastic quality of a plasma screen, it's going to be within your budget. That's what I like to pay.
CALLAWAY: So many other people won't wait like Todd will. Because so many people will not wait, like Todd will. They want that new toy, and they've got to have it this holiday season. Will we see the prices go up? KRUGMAN: Not everybody is lucky enough to get a 52 inch high definition flat screen TV, but the prices have been coming down, and we expect them to come down even further as the technology -- as it becomes cheaper to make, it will be passed on to consumers. You know, within the next five years, I think we're going to see HD the norm in living rooms.
CALLAWAY: You guys have been terrific. Todd Mark and Scott Krugman, thanks so much for being with us. And thank the viewers for their questions.
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Aired November 22, 2003 - 16:31 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CATHERINE CALLAWAY, CN ANCHOR: Well, welcome to "Dollar Signs," everyone, where we help you make the most of your cash. With next Friday kicking off the holiday shopping season, we want to give you some tips on how to stay out of debt, but still get all of those names crossed off of your gift list.
We have a couple of people to help us out today. Todd Mark of Consumer Credit Counseling Services of Atlanta. And Scott Crugman with National Retail Federation in Washington.
And Scott, we're going to get back to you in just a minute. First let's check in with you, Todd, and get tips on things we should do to plan for our holiday shopping. I know one of the first things you say, Todd, is make a budget and stick to it.
TODD MARK, CONSUMER CREDID COUNSELING SERVICES: Absolutely. The most important thing to do is look at what you spent last year and are you going to be able to afford to do this year? Hopefully, people have been saving all year long so they've got money to pay for all their expenses right now for the holidays.
But if not, here's what you got to do. Make a budget of what you can spend right now for the holidays whatever you're comfortable with. I want you to make a list of everyone you're shopping for. Mom, dad, Uncle Jay, grandma, grandpa, wife, daughter, boss, everybody. Put their names down there, then put a dollar amount on how much you're going to spend for every person.
The trick is sticking to it once you've got that plan put forward. Then, of course, you've got to make sure you can manage that debt. Obviously, we'd love it if people could pay off everything once the bills come in January. But obviously, not everyone can do that. So, we'd like to urge you to try to pay it off within three to four months.
Last thing we don't want you to see is your paying your holiday bills for 2003 at the holidays of 2004.
CALLAWAY: You know, is there a rule of -- a good rule of thumb on how much you should spend on the holidays per your budget or per your income?
MARK: Well, Catherine, you know there's so many surveys that are out right now saying $800 is the average, $1,000, $1,200. It truly is going to depend on the individual or the couple with their income situation and what their debt level is. If somebody's going to be spending $1,200 this holiday season and they already have $20,000 in credit card debt that they're carrying, then you're just accumulating and accumulating, and you're never going to be able to reduce your debt.
On the other hand, if you've got cards that are completely empty and you want to put some things on and you know you can pay them off in a couple months, I don't think there's anything to worry about.
CALLAWAY: There's other things to worry about too besides gifts: gift wrapping, mailing gifts, and it gets expensive.
MARK: And you know what people forget at the holidays? Travel. How many times you go home to see mom and dad, you forget about the airline tickets, hotel, gas if you're driving, meals that you wouldn't ordinarily pay for. So, there's so much more than the stamps for holiday cards, gift wrapping, ribbons, bows and tape.
CALLAWAY: One more question. It's so tempting to use those credit cards, whether it be a credit card company or store credit card. Do you advise, if you don't have the cash, not to use the credit cards?
MARK: Well, as long as you've got a promise to yourself that you're going to pay off your bills within three to four months. Again, Catherine, I'd love it if everybody had cash and they paid for everything in cash, because that way you can't overspend what you have. But as long as you've got a promise and you say, well, three to four months, I can do it, that's the trick.
Now, if people don't have the discipline and they've already got debt on their credit cards, you know what I'd say? Maybe you've got to reevaluate what you're spending and what sort of gifts you're giving.
CALLAWAY: Let's go, if we can, quickly to Scott Krugman, who is with the National Retail Federation in Washington. Scott, my biggest question to you is what kind of year are we going to have this season? What kind of season is it going to be? We've heard all the bad numbers. What do you think's going to happen?
SCOTT KRUGMAN, NATL. RETAIL FEDERATION: It's been a tough couple of years for retail, no one will argue that. However, the second half of this year has been pretty strong. We're actually expecting a pretty solid holiday season, about a 5.7 percent increase over last year. That would translate into about $217 billion into the economy.
CALLAWAY: What about discount retailers versus, say, the high end retailers? Are you going to see a difference there? Are people going to -- this year, because so many of us have smaller budgets this year. Are you going to see more Christmas purchases made there?
KRUGMAN: Hey, consumers are price conscious right now. Who can blame them? The good news, really, though, is all retailers are trying to be discounters. Discount retailers do have a certain inherent advantage in a weaker economic period, but according to our survey, consumers are going to be taking advantage of all shopping channels. They'll be going to discounters, they'll going to department stores, specialty stores -- excuse me. And, of course, shopping online.
CALLAWAY: And these high end stores are not going to let these shoppers pass them by. Certainly, they're going to be gouging some prices for them.
KRUGMAN: The bargains are starting right now. You'd be pretty hard pressed not walk into any store and not see a good 20, even 30 percent off sign.
CALLAWAY: Do you think we're going to see discounts all the way around even in the discount stores?
KRUGMAN: You're definitely going to see a promotional environment. It might not be as drastic as last year where a lot of unplanned markdowns were implemented to clear merchandise.
CALLAWAY: There really were a lot.
KRUGMAN: Retailers have done a good job of keeping their inventories leaner. But there is a catch, that means consumers need to shop probably now. They shouldn't wait until the last possible minute to get the best possible price, because they're going to have to make some compromises in some of the gifts they do purchase.
CALLAWAY: So you're saying some of the best buys may be at the beginning of the season and not closer to Christmas?
KRUGMAN: You've got to have a value equation. Know how much you're going to pay but know exactly what it is you're going to buy. If you see that must-have item that's off the shelves really quickly and you see it, buy it now.
CALLAWAY: All right, Todd, Mark, stay with us. We're going to be right back to take your questions. We have phone calls and e-mails coming up in "Dollar Signs." Of course, you can still send in your e- mail and call us too. Here's our phone number 1-800-807-2620. We'll be right back.
(COMMERCIAL BREAK)
CALLAWAY: Welcome back, everyone, to "Dollar Signs." We're talking about how you can make it through the holiday season without breaking the bank. We have Todd Mark of Consumer Credit Counseling Service. We also have todd Scott Krugman. He's with the National Retail Federation. They're sharing their expertise. Thanks for joining us today gentlemen.
We already have some e-mails for you. This is from Sam in Rochester. Scott, I'm going to start with you. You can answer this one. He says, "aside from black Friday is there any other day/period where shoppers can expect good deals?"
KRUGMAN: Throughout the holiday season they will. The closer you get to the end of the holiday season, you're going to get the best buys. Retailers are then at that point, ready to clear out. Your best bargains are going to come a week after Christmas, where 10 percent of holiday sales are done.
CALLAWAY: All right. Chris it on the line with us from Massachusetts. Hello, Chris. What's your question?
CALLER: Hi, guys. I'd like to buy some stock options as a gift, like 45 million in options Dick Cheney had in Halliburton or the 4 million Michael Powell, the head of the FCC, made overseeing the AOL/Time Warner deal.
CALLAWAY: Let's move on. Yes, let's move on. We have another e-mail. This one is from Jefferson, and he says, "All my friends think that I'm notoriously cheap, but I believe, why pay more for the same goods. How can I get impressive gifts without breaking my budget?" And you, that's a good question. Sometimes you feel guilty, Todd, when you buy things that are on sale to give as a gift. Should we?
MARK: Well, absolutely not. You want to maximize your dollar. And Scott just talked about it, being a smart consumer here at the holidays is the most important thing. If you've got a budget of $800, but you can buy $900 worth of goods for the same $800, that's a great deal.
And when you're shopping around and looking at the fliers, you will see deals that one week will be there and not the next week. So, know the price point that you want to purchase goods at.
But at the same time, Jefferson, you should know there's so many great gifts that you can give that aren't going to cost a thing. Maybe you make a little, you print out a note from your computer that says I promise you a night of baby-sitting, or I'm going to clean the house. I'm going to get the car washed. I'm going to make a homemade meal. You know what that costs? Nothing except unconditional time on your behalf.
CALLAWAY: I'll take all of those.
MARK: I love gifts like that. And they come from the heart. They mean a lot more than a blouse or a tie.
CALLAWAY: Scott, do you have anything to add to that?
KRUGMAN: I think that's a great point. I wouldn't be concerned so much with what the item costs. It's the holiday season. And as they say, it's the thought that counts.
CALLAWAY: Let's try the phone lines again, shall we? Let's see if we can get a serious shopper on the line. We have Stephanie from Georgia. Hello, Stephanie, do you have a question?
CALLER: I actually called in with a tip. I really like your money saving ideas, and another inexpensive idea is most people do not use the grocery coupons that come in the Sunday paper. And if you're one of those people who usually throws those away, a very generous gift to a friend or a family member, who uses grocery coupons, is to give them a certificate and tell them you'll be giving them your grocery coupons all year long. That gift is worth about a thousand dollars for grocery coupons.
CALLAWAY: Stephanie, are you talking about cutting them out for the person? I would love that.
CALLER: Not cutting them out. That's a lot of work. I wouldn't expect that. You can just -- I'm a coupon user, and my friends give me their coupons not cut out. Just the whole flyer from the Sunday paper, and that saves me an extra thousand dollars a year when people give those to me. So, if you have a friend who uses grocery coupons and you don't use yours, it's a really generous way to help them out.
CALLAWAY: Thank you, Stephanie. I'm sure you like that idea, Todd.
MARK: Wow. Coupons all year round. That's a great idea. Again, that goes back to being a smart shopper.
CALLAWAY: Let's go now to Liz for another e-mail. "Why doesn't everyone shop by catalogue or the Internet?"
You know, do you think that's going to be used a lot this season, Scott?
KRUGMAN: We are seeing more and more usage of the Internet and of catalogs. As people get more comfortable with the technology, there's more broadband. The thing is, though, people still want to get out to the stores. They want to touch and feel the merchandise.
What retailers are doing are trying to integrate all the channels together. You can buy online or pick up in the store. Or buy online and return the merchandise to the store. They want to make it as convenient as possible for the consumer.
CALLAWAY: Scott, let me ask you about the hot items. Are we going to see a couple of those? We do every season, I don't know why I'm asking that. I know we will. Will there be as many this year, you think?
KRUGMAN: That's a great question. We haven't seen the hot toy emerge. There seems to be no new game consoles, like an Xbox or a Playstation. What's hot right now it appears to be are those digital camera phones. They might actually be more popular this year than digital cameras themselves.
CALLAWAY: Really? A digital camera? Todd, any ideas on how we can all afford a digital camera? Those are the kind of gifts everybody wants. I know you said you were going to buy a DVD finally this year.
MARK: I'm a late adapter. So, I'm the last person in America who doesn't have a DVD player. I know I'm getting one. I asked for all my holiday gifts to be DVDs. What's interesting is that I've been pricing the DVDs I want. I've been telling people I want you to get this at this store, this at that store, and this online. It all goes back to being a smart consumer. If you want to give a list to people of what you want, find the best price for these things.
CALLAWAY: Shop around, right?
MARK: I'm all DVD this year.
CALLAWAY: I love it when a family member tells me what they want and tells me where they've seen it advertised at a really great price. That's another gift you can give to somebody is tell them where to get it.
KRUGMAN: Hey, Catherine, I just want to mention I just bought a DVD player for $38. I want him to be proud of me.
CALLAWAY: I think he his.
MARK: And Scott, what do you think the low price on DVDs is going to be on black Friday? Could it reach $30? $25?
CALLAWAY: For a DVD player, from the low end technology, where you just need it to play, you're definitely going to be able to find one for $40 easily. Depending on what type of quality people want, they'll go up in price from there.
CALLAWAY: And DVD cameras -- and digital cameras are actually going to be very popular this year. Think we'll see good sales on those?
KRUGMAN: Definitely see good sales on those. Again, how good you want the quality depends on how much it's going to cost. You can get a really nice practical digital camera for under a hundred bucks now.
CALLAWAY: All right. We have a phone call. Kathy from Georgia, I believe. Are you there?
CALLER: Yes, I am.
CALLAWAY: What is your question?
CALLER: My question is for Todd. Todd, the holidays are over. We've spent all this money, we used our credit cards. How do we know to go to a company like yours, like CCCS? What are the signs?
MARK: Well, if you're overwhelmed and afraid of opening up your bills in January or say it's Christmas morning or it's Hanukkah night and you've got all these gifts, and you say, you know, I know I could have afforded what I bought or what my spouse bought or the rest of my family bought. Those are signs you're in trouble.
If you open up the bills and say there's no way we can pay off the bills this month. We might not be able to pay the minimums. That's when it's time to sit down with a certified Consumer Credit Counselor Sevice. They'll sit down and review your budget, go over your income, your monthly expenses, and look at your debts and see how quickly you can get those things paid off.
CALLAWAY: You know, Scott, it is a bad habit of going to the stores during the holiday season and being lured in and, you know, those things look so beautiful and those beautiful packages, and you want to spend the money. What about shopping on the Internet? Shopping in the catalog? It takes a while for the gifts to get there. It's hard for consumers to wait.
KRUGMAN: It is. Especially when you're buying for yourself. Our advice, when shopping online is know the shipment dates. Every online retailer or just about every one will post the last day you should buy and expect it before Christmas. So definitely look at the Web sites, look at the policies, look at their shipping options, and you should actually be okay this holiday season.
CALLAWAY: All right, we have a question from Lisa. "I would like to buy my husband a drill, as this is what he needs to finish the things that he started." And apparently has not finished. "How much should I pay for one without going overboard?"
I'm not -- a little concerned about this question. There are so many different types of drills, but I'm assuming it's the basic handheld drill. How do you go about -- this is a good question -- how do you go about finding an item like that? How do you go about searching the retail industry to find the best buy for one of those?
MARK: Lisa, I'll recommend a couple things for you to do. First off, go through the Sunday flyers. If it's something like a drill, I would think the home supply stores like a Home Depot or Lowes, look at their flyers and then go online.
Maybe check out "Consumer Reports" and see if they've done a review of the drills in the industry. They'll break it off by quality and by price. Then you'll know the baseline that you should be looking for an item like that.
Also, make sure you ask your husband if he's really wanting a drill, maybe there's a special one with all these great gadgets and features, and he'll be disappointed if he doesn't get that very drill.
CALLAWAY: Scott, any suggestions?
KRUGMAN: I think those points are great. The best thing about the Internet, it's made a lot of consumers smart shoppers. There's plenty of Web sites out there where you can do price comparisons, like shopping.com, for example. Once you find the best price, go to the store. Or even use eBay. There's a lot of people out there with the same merchandise that they want to sell that's new or like new.
CALLAWAY: All right. Todd, Scott, stay with us. We'll be right back, everyone with more of your emails and phone calls. Stay with us.
(COMMERCIAL BREAK)
CALLAWAY: Welcome back to "Dollar Signs." Todd Mark of Consumer Credit Counseling Service, Scott Krugman with the National Retail Federation taking your calls and e-mails, telling us about how to get the best holiday gifts.
I'm still not over this $30 DVD player you say you've found. I don't see those anywhere. On the telephone now, we have Genevieve from Florida who has a question for us -- Genevieve.
CALLER: One of the things I would like to say is I don't want anything that I have to wash or dust anymore. So I told my children last year about that. So they gave me oil changes for my car. They gave me a year's subscription to the newspaper. And this year, they're giving me a new kitchen floor. That's all I want. You know, I can get all kinds of things. I'm a mother, a grandmother, and a great grandmother.
CALLAWAY: You know, that's a great idea Genevieve. Scott, Todd, it's tough to get out of your family members what they really want. They always say, oh, don't get me anything, and then you end up trying to guess what they want. But it's those practical things that can really help you out -- Todd.
MARK: Well, Genevieve, I'm so proud of you to be able to communicate with your kids what you really want. And those are practical gifts that you can use year round. It's going to mean a lot more to you when you're walking around on that new kitchen floor. So that is just fantastic.
And, Catherine, if you feel that people aren't talking about things like this, talk with your spouse, talk with your parents or kids about what you want and what they want. So that way, you're not wasting your time and your money on gifts that aren't going to mean a lot for the rest of the year.
CALLAWAY: Hey, Scott, the retail association is there to help you. Some of these retailers love it when you buy gift certificates and things like that at some of these home repair centers, you know, new floor. There for you if you want it. Right?
KRUGMAN: Gift cards are the latest craze. And we think they're going to be more popular than ever this year. We actually just conducted a survey and we found out that more than 70 percent of consumers are going to be giving gift cards this year, and what a great way for the person that has everything to give them something for their favorite store or for the category that they like to buy the most.
CALLAWAY: And they get to pick it out as well. Mitchell's on the line with us. Hello, Mitchell, do you have a question?
CALLER: Oh, yes. I just can't believe you just said that because I'm a consumer. No, don't do that. I don't know if you know that, but gift cards have an expiration date. CALLAWAY: That's a good question. Do they have an expiration date? It seems to me that as long as you have that gift card, it should never expire.
KRUGMAN: I'm glad he asked that question because there is something important that consumers know. Gift certificates used to have an expiration date. 12 months, you couldn't use it. What gift cards have is something called a dormant fee. If you go a year without using it or 12 or 18 months without using it, $1.50 is deducted. Retailers are charged are $1.50 by the third party group that implements the technology, and it's a charge that passes on to consumers. We find, though, that 98 percent of consumers use their gift card to the full value.
CALLAWAY: Do they really? Are there different laws on the books in different states on how gift cards should be used or can be used?
KRUGMAN: There are different laws. The important thing to know here though, is a retailer does not book a sale until after the gift card has actually been redeemed for merchandise. When they sell the gift card, it doesn't count as a sale. And they cannot count it as a sale on their books, again, until it's redeemed.
And in some states, they have certain things called the sheet laws, where the states can then claim that money for themselves if the gift card's not used and no merchandise has been exchanged.
CALLAAWY: Hey, Todd, are you still on the line with us?
MARK: Oh, yes, absolutely. Catherine, the only thing I would add on gift certificates or gift cards is make sure you're not buying a gift card or certificate for a store that might not be around a couple of months after the holidays.
Suddenly, you've taken your cash and turned it into a certificate or card that's worthless. Make sure it's not only something that the person you're giving it to really wants or a place they want to shop at, but make sure that place is going to be around after the holidays.
CALLAWAY: I knew you had plenty to say, because I saw you in the box nodding your head furious to everything he had to say. Let's go to an e-mail from Sam. "What do you think about the sales of plasma televisions? Will they rise during the holiday shopping season?" Let's start with you, Todd.
MARK: Well, I've already revealed to you I'm a late adapter. I'm waiting for those prices to come down at least another thousand or so. I think just as we've seen DVDs over the last three years drop dramatically in price, if you can hold off for a few more years for the fantastic quality of a plasma screen, it's going to be within your budget. That's what I like to pay.
CALLAWAY: So many other people won't wait like Todd will. Because so many people will not wait, like Todd will. They want that new toy, and they've got to have it this holiday season. Will we see the prices go up? KRUGMAN: Not everybody is lucky enough to get a 52 inch high definition flat screen TV, but the prices have been coming down, and we expect them to come down even further as the technology -- as it becomes cheaper to make, it will be passed on to consumers. You know, within the next five years, I think we're going to see HD the norm in living rooms.
CALLAWAY: You guys have been terrific. Todd Mark and Scott Krugman, thanks so much for being with us. And thank the viewers for their questions.
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