Enron styled accounting has sneaked into today’s discounts.

As the market place looses more and more ground in an ever sluggish economy consumers are being bombarded with ad’s of huge savings and buy it now pricing.

Being a fairly conservative consumer I can’t say I don’t welcome the lower prices and better deals; however what I am finding is more funny math and accounting irregularities that appear as good deals on the outside but in the end aren’t as good as they were portrayed. Take the American automobile manufacture General Motors.

Currently they are running an advertising campaign that boast employee pricing, rebates of up to $5,000.00 and 0 % APR. Many would agree that this is really a great buy on a brand new GM car but what you discover is a little different situation once you’ve picked out your new car and are ready to close the deal. The rebates are normally stand alone and do not work in conjunction with any other promotions or offers. The 0% APR is for excellent credit rating customers only and is only good for 24 months making the monthly payments hundreds of dollars more than most budget for, the typical auto loan is for 60 – 72 months. In the end most pay normal APR rates in a given market and find the rebates and employee pricing a small discount off the total amount they finance. So is this a still a great deal or a different spin on savvy advertising?

How about department stores that run specials using multiple percentages of savings? Here is an example to watch for. Let’s take a piece of furniture that retails for $1,000.00. The store is offering a 25% + 25% savings making the $1,000.00 piece of furniture cost $500.00 correct? Not so. The two percentages do not get added together, they just appear that away when being advertised. So how does this work. Take the original cost of $1,000.00 and subtract 25% which equals $250.00 making the new price $750.00. Now deduct 25% from the $750.00 which is $187.50 making the final sale price $563.50 not $500.00. I’ll bet if you research the recent past you’ll find these same sale figures on like items just being expressed another way to help you to make a decision to buy it now.

Another group are the big savings on electronics such as TV’s and digital cameras. These prices I found were true as advertised with one caveat, to get the discount, you have to purchase an aftermarket extended warranty which in the end makes the savings vanish instantly. The warranty companies in conjunction with the electronics manufacter are rolling the dice that the consumer will never need the warranty and if they did, would forget they even had it in the first place. Still think it’s a good deal?

A recent survey revealed these new wave forms of advertising and the effect it has on the American consumer. The results were conclusive: if it seems like a great deal people will buy no matter what the ultimate savings are !! The only advice I have is to allow time for due diligence when considering a major purchase while leaving your check book at home.

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