Be a smart holiday shopper this season

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4. Get and give gift receipts
This is important as retailers crack down on fraudulent returns. The person you give the gift to will probably need that receipt to return or exchange it. Without a receipt, the store may only give a credit for the lowest price the item sold for, not the price you paid for it. That could be a substantial difference. A receipt is also needed for warranty service.

5. Say no to extended warranties
Buy any electronic product or appliance and you may be pressured to buy an extended warranty. This “extra protection” is a huge profit center for retailers.

Consumer advocates are universally opposed to extended warranties. “They’re a waste of money,” says Tod Marks, a senior editor at Consumer Reports. “For most products it represents very expensive insurance to protect you against a minimal risk.”

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Based on survey results from literally hundreds of thousands of readers over the years, Consumer Reports says most products simply don’t break during the first three years of ownership, the period most often covered by extended warranties. And when a repair is needed, it rarely exceeds the cost of the warranty.

“They’re a bad investment,” Marks says. “You’re better off chancing it.”

6. Be careful with store charge accounts
“How’d you like to save 20 percent on your total purchase?” the store clerk asks. All you need to do is apply for the store’s charge card on the spot. That’s a $200 savings on a thousand dollar TV. It’s a mighty tempting offer, but you need to think carefully before you say yes, especially if you expect to be in the market for a mortgage or car loan in the next few months.

“Opening new credit cards could unwittingly drag down your credit score and cost you in the long run,” cautions Greg McBride, Senior Financial Analyst at bankrate.com. “The savings you score today could be more than offset by the higher interest rate you pay on that loan in early 2008.”

If you’re sure you won’t be borrowing money anytime soon, then opening the retailer credit card can be a way to score some easy savings.

7. The way you pay is important
Always use a credit card for online or mail order purchases. Don’t use a debit or check card. I know the banks say they’re the same as using a credit card and offer you “zero liability protection.” Trust me on this – a debit/check card is not the same as a credit card, especially when it comes to fraud protection.

“These cards typically put consumers at much greater risk than credit cards because they offer fewer consumer protections in the event of a loss,” says Beth Givens, founder of the Privacy Rights Clearinghouse. “And because these cards access funds directly from your bank account, your money will remain missing while you and your bank sort it out, which could mean bounced checks, late fees, and numerous other problems.”

It’s also important to choose the right credit card. Some will double the manufacturer’s warranty. If you have one of these premium cards in your wallet, it makes sense to use it.

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