Christmas is a once-a-year opportunity for the unscrupulous to scam consumers caught up in the festive spending spree. Holiday shoppers are popular targets for scams that cost Australians tens of millions of dollars every year.
And though not a 'scam', the Boxing Day sales can certainly be a trap. We've got some tips on how to survive the sales and maybe even buy something you need!
The 5 scams of Christmas
1. e-greeting cards scam
- You receive an email that claims a family member or friend sent you a card. However, if you follow the link, malicious software is downloaded and installed on your computer.
TIP: If you're not sure about an e-greeting supposedly from someone you know, ask them if they sent it before opening it.
2. Parcel scam
- You receive a call or a notice is left at your door about an unsuccessful delivery. The caller may claim to be from Australia Post, even though Australia Post never makes such calls. Then you're asked for a payment or for personal details, such as your bank account or credit card.
TIP: Call the delivery company directly using their official number to check if the situation is legit.
3. Charity scams
Sadly, some scammers try to profiteer from the spirit of the season. They may:
- claim to collect for a charity that helps disaster victims or sick children
- approach you while you're shopping
- send you an email
- invite you to visit their fake website.
TIP: Don't donate to someone who approaches you out of the blue. Instead, consider which causes are important to you and donate to the charities directly.
- Another potential trap is charity gift cards. The charity may only receive a fraction of what you paid.
TIP: Legitimate charity catalogues allow you to buy gifts for someone in need and send a card to a friend or family member in whose name you have bought the gift. World Vision and Oxfam, for instance, have catalogues featuring a range of gifts from chickens and goats to clothing and medicine for those in need.
4. Gift card troubles
Complaints about gift cards that expire too soon land regularly in our inbox here at CHOICE, as do complaints about cards that impose unreasonable restrictions.
CHOICE spearheaded a major investigation into gift cards in 2010 that sparked a government inquiry. Unfortunately, the government decided to let the industry regulate itself.
But there are still some steps you can take to avoid gift cards that end up leaving the recipient empty-handed. The first one is to read the fine print on the card.
Look for cards:
- with no expiry date, such as those from Bunnings, Toys R Us, IKEA (Perth and Adelaide stores) and EB Games
- that can be used at everyday stores, such as Coles Group & Myer or Wish (Woolworths group)
- that can be tracked or replaced if they get lost (eg. cards that can be registered to an individual).
Avoid those with:
- a short expiry date (less than one year)
- conditions and restrictions (such as "can't be used on weekends")
- fees - the Australia Post Visa gift card, for example, charges a $5.95 "activation fee", and $3.99 to call customer service.
5. Overpriced hampers
Hamper companies promise to deliver everything you need for your Christmas feast to your door, claiming they'll help you budget by allowing you to prepay in convenient instalments over the year. They also offer groceries in bulk, and gifts such as electronics or gift cards. But here are the rubs.
- Goods may be overpriced compared to the cost of the same goods purchased online from Coles and Woolworths (including delivery).
- The usefulness and festiveness of some of the items is questionable. Chrisco's Traditional Hamper includes tinned spaghetti and two-minute noodles.
- Hamper companies also sell a range of other goods, including electronics, but check for inflated prices.
TRAP: Beware of the cancellation policies for Chrisco, Hamper King and Castle Hampers. You'll be charged between 18 and 50% of what you've already paid if you cancel after the 21-day cooling off period.
TIP: To budget for next year's Christmas, consider setting up a savings plan. Check out the best online savings accounts.
Boxing Day sales
You can snap up some great bargains and stock up on Christmas decorations for next year during the end-of-year sales. But they can also be a real trap, and you can easily leave with a whole lot of stuff you didn't want or need. Use our checklist below to make the most out of the post-Christmas sales.
- Plan: Make a list and divide it into "needs" and "wants". Check flyers and websites for the best offers before heading out to the sales, and be sure the offers are honoured at the store.
- Shop around: Just because something is on sale doesn't necessarily make it the best deal. Many shops are willing to price match.
- Haggle: You'll have better leverage if you can pay cash.
- Buy online: You can avoid the crowds, but check the reputations of online sellers and be very careful if they're based overseas.
- Don't overspend: And if you're prone to getting into credit card debt, make sure you use a low-rate credit card.