If it's important enough that it's for a limited time only, it must be a great deal, right? Sales people know that if they let you out of the door, there's a better than average chance that you're not going to come back. Car salesmen will go to great lengths to give you offers you can't refuse because they know that if you have time to think about it, the answer will most likely be no. (To learn more about limited time offers, read The Economics Of Group Buying Sites.)
TUTORIAL: Budgeting Basics
E-commerce has changed the way we do business in the 21st century. The holiday season sees more business done online than in traditional retail stores, and because of this the sales strategies that once took place in a store have been adapted to work online.
Flash sites are the new way to sell online. Here's how it works. You go to one of the many flash sites and find that there's a 60% off deal on a Caribbean cruise. It definitely looks like a good deal because the retail price is a lot higher than the special price. The catch is that this sale is only for a limited time. It might be for a few days, 24 hours or a super special deal that only lasts until the countdown clock hits zero.
Because we all love a bargain, we want to believe that we found a deal that others missed, but rarely is that the case. When flash sites were in their infancy, the retail world was a different place. In 2009 the economy was at its recent lows. Those lows kept consumers out of the stores and caused retailers to have warehouses full of inventory. They were desperate to generate cash flow and even if they sold their products at a loss, it was freeing up cash which made their earnings reports look better to investors. Flash sites were the place to go if you wanted to land one of those deals.
However, 2011 was different. Inventory levels had returned to levels making flash sites full of the bargains they once had. And now that there are so many competing sites, some resort to tricks like inflating the retail price to make their price look more like a bargain. (For other ways to score a travel deal, read 7 Ways To Save On Last-Minute Travel.)
Remember that cruise? The New York Times reported that even if you can get a good deal, it will most likely come with restrictions that make it far less attractive. If it's a travel deal, you may not be able to cancel, reschedule or transfer the package. Later on, as The New York Times found out, better deals may appear on other sites making that impulse buy not as good as you first thought.
Also, there may be other fees and charges. That designer sweater that you bought at a Walmart price may have some hefty shipping and handling charges, and that hotel room could have taxes and other fees that were included in the price.
The Bottom Line
There are still some deals to be found on these sites, but don't assume that because it has a countdown clock that it's a bargain. Never purchase something without doing comparison shopping. If you don't have time to compare prices at other sites, let that clock run down. There will be other great deals that will come your way. (For more on travel, see The Best Bang For Your Holiday Travel Budget.)