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The lure of online shopping

Question: In this age of online shopping, do I really get a better deal by browsing the Internet rather than just physically visiting stores? Asked at “Ask a Friend, Ask Efren” free service at www.personalfinance.ph, SMS, Viber, Twitter, LinkedIn, WhatsApp, Instagram and Facebook

Answer: One of the main benefits of online shopping is supposedly the lower prices brought on by transparent pricing among competitors and in depth product/service disclosures.

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Sidebar, the Consumer Act of the Philippines has a provision that requires the display of only one tag price, the all-important suggested retail price or SRP. But where bidding is legally allowed, something akin to price discovery is present.

According to Investopedia, “Price discovery is the overall process, whether explicit or inferred, of setting the spot price or the proper price of an asset, security, commodity, or currency … Simply put, it is where a buyer and a seller agree on a price and a transaction occurs.” There are also the buyers’ comments that can attest to the appropriateness of pricing and quality of the product or service. It pays to look at these comments to get a better handle on what you are pining for. But do not just be on the receiving end. Make your own comments to help future buyers. Some Apps even remind buyers to make such comments.

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On a lighter note, I have discovered that online shopping is a great replacement for a broken doorbell. Whereas there was no enthusiasm before with seeing who was at the gate, now delivery services heralding the arrival of packages send people in our household rushing to the gate to see whose package arrived.

But you need to be careful because online sellers track your browsing behavior and will send ads your way where­ver page you are on the internet. Subliminal advertising is not as sublime as it used to be.

Online sellers have also mastered the art of holiday spending creation. For one, sellers take advantage of the nth day of the same numbered month to launch sales discount promotions. As an occasional online shopper (i.e. shopping whenever there are occasions), I have noticed that some of the items I am following steadily go up in price over days and months and then drop to their original level during the said sales discount promotions.

In behavioral economics, too many choices lead to analy­sis paralysis. But online sellers have a solution for that too and it is called “Add to cart” or ATC. It makes perfect sense for you to first park in your cart the choices you have narrowed down for further weeding out later on. However, the ATC also brings you one step closer to the checkout page. And when you are aimlessly browsing online selling platforms, you will soon find yourself suffering from the ATC disorder, of having too long a list of items in your shopping cart.

More importantly, please note that prices online are at SRP. Particularly for home appliances, you can get the real lower price if you were to just haul yourself to the physical store, with consideration given to health safety protocols, and pay for the item in cash, in person. There may be delivery charges, which are sometimes waived with online shopping. Still, such charges will not offset the savings you will get from paying the cash price. After all, SRP is just what it is, only a suggestion.

So, while online shopping does bring some benefits, keep your eyes wide open as you may just end up being an online shopping junkie.

Stay safe and healthy. INQ

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Efren Ll. Cruz is a registered financial planner of RFP Philippines, seasoned investment adviser, bestselling author of personal finance books in the Philippines. Join our Yaman Coach free webinar series. For details, email [email protected] To learn more about personal financial planning, attend the 84th RFP Program in November 2020. To inquire, email [email protected] or text at 09176248110.

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