What cost of living crisis? Millions of Australians are expected to spend $10.1 billion during the end of financial year (EOFY) sales.
Many products, from cars and holiday packages to clothing and white goods will be available at marked-down prices over the next few weeks.
Clothing and accessories will attract the biggest spend, followed by electronics and technology, household items and decorations and then appliances and white goods.
To put the estimated $10.1 billion EOFY spend in perspective, in 2023 Australians spent $361 billion on retail goods, with $63.6 billion of that spent online.
With such high spending, consumers need to make informed decisions to maximise their savings and avoid pitfalls.
Buyer beware
It is important to understand the return and exchange policies of the different retail stores.
Most retailers allow shoppers who change their mind up to 30 days to return and receive a refund or exchange the product. Some may have shorter return periods or may not accept returns on sale items.
These items are sometimes referred to as final sales, non-refundable purchases, last-chance deals, no-return sales and clearance items. This means if a customer bought something on sale and later doesn’t want it, they can’t return or exchange it.
Some retailers have specific conditions about where items can be returned. For example, in Melbourne David Jones requires boutique brands to be returned to specific branch locations.
For example, items purchased instore from Chanel can only be returned at Elizabeth Street and Bourke Street Mall branches.
Other conditions might include no refunds/no exchanges on large electrical items, furniture or mattresses unless faulty or damaged. Or retailers may only offer instore credit or charge a 25 per cent restocking fee when a customer cancels an order for a large or bulky item.
Many retailers, such as streetwear brand Culture Kings, also require a payment if the return process involves shipping.
As well as these conditions, retailers require any returned items to be in their original condition and sometimes, their original packaging. Being aware of these policies can help customers make more informed decisions and avoid being stuck with items they don’t want.
What to buy and where to get it
Certain items, such as off-season clothing, electronics and furniture are often discounted during EOFY sales, making it a good time to get them at reduced cost.
However, some items, like the latest Playstation or newest smartphone, may not be as heavily discounted and might be better bought at other times of the year.
Shoppers should also avoid buying items they are unlikely to use or consume before they expire including perishable goods like food, cosmetics and vitamins.
Customers should also consider where to buy their items. Online retailers often have competitive prices and a wide selection, but some customers may prefer to see the item before they purchase instore.
Multi-channel shopping is a combination of both instore and online shopping. It gives customers the flexibility to choose how and where they want to browse and purchase.
For example, some customers prefer to touch, feel and try a product instore but then make the purchase online for convenience, taking advantage of any free shipping offers and online discount.
Pressure tactics
It is important to be wary of any deceptive tactics to persuade you to buy unwanted products.
For example, some stores might use misleading advertising or pressure tactics to convince customers to make purchases with the feeling of fear of missing out (FOMO).
Our research found FOMO played a role in panic buying.
During the EOFY sales, businesses may try to create a sense of urgency by claiming that items are selling out quickly or prices will increase soon.
For example, online sites might state a product is "low in stock", "151 items have been sold today" or "25 people are watching this item".
By being aware these tactics are intended to lock them into buying, customers can take their time to consider purchases carefully and avoid being swayed into buying things they do not really want or need.
Ultimately, the best approach for customers is to plan ahead, research prices and shop around to find the best deals for their needs.
Why we have EOFY sales
The original purpose of the EOFY is to mark the end of a 12-month accounting period for businesses and individuals. EOFY sales help businesses clear out last year’s stock and make way for new.
Moving stock also helps to improve the bottom line by converting unsold goods into revenue.
If consumers are savvy, they can find ways to make savings while also putting money back into the economy.
Park Thaichon is associate professor of marketing at the University of Southern Queensland.
