Black Friday comes early at big chains

With analysts predicting aggressive holiday sales this season, many retailers have gotten a head start on Black Friday by dangling generous discounts well in advance of Nov. 27. 

Walmart, Kmart, Sears, Toys “R” Us, Best Buy, CVS, Target, Staples, HH Gregg, Kohl’s, Lowe’s, and Ace Hardware are some of the big names hoping to cash in by enticing early birds with bargains prior to the day after Thanksgiving, traditionally one of the busiest and bargain-laden shopping days of the year.

You can scope out many of the deals – and rumors of deals – ahead of time at a variety of Web sites such as Black Friday Ads, The Black Friday, TGI Black Friday, Black Friday Info,  Deal News, Deal Taker, and Black Friday FM.

The most efficient way to discover what’s on sale at your favorite stores or online is to sign up for e-mail alerts. By doing so, you’ll also be privy to special offers like free shipping, announcements of upcoming promotions, exclusive savings for store credit-card holders, deals of the day, and periodic markdowns like special 3-hour sales. One note of caution, however. Many of the doorbuster ads on retailer Web sites often lack a model numbers for big-ticket items like computers and TV sets. That can hinder comparison shopping.

This year, Walmart ushered in Christmas on Halloween with Black Friday pricing on a variety of “secret” in-store specials. They’ve also cut prices weekly on thousands of items from bananas to board games throughout the holidays. More recently, the company announced additional price rollbacks of an additional 20 to 30 percent on 100 popular toys, which comes of the heels of the chain’s season-long holiday promo of 100 toys at $10. Perhaps of even more note, the chain said on Wednesday that it will keep all of its stores open round-the-clock on Thanksgiving weekend and implement new crowd-control measures in the aftermath of last’s years fatal trampling of an employee during a frenetic Black Friday sale. The chain has also devised another strategy to deter mayhem. Instead of lining up outside the doors for the 5 a.m. sales to commence, people will be dispersed in gathering areas throughout each store.

Over at Sears, the chain began offering “Black Friday Now” deals on Oct. 31, and they’re slated to continue every Saturday from 7 a.m. until noon through Thanksgiving.  Some of the early bargains included a Craftsman 302-piece mechanic's tool set at half off; a ProForma XP elliptical exerciser for $400 (regularly $700), and a 42-in. Zenith Plasma TV for $499, a $250 savings.

Kmart kicked off its “Better than Black Friday” campaign last week, which features 15 new doorbusters on Fridays. Some of the recent deals have included Protégé basketball shoes at $15 a pair, General Electric artificial Christmas trees at 25 to 33 percent off, Basic Editions jeans at $7, and a Little Letters Learning Laptop at half price.

Earlier this week, Target took aim at Walmart by taking pre-orders of some highly anticipated DVDs at $10, the same price point they sell for at the nation’s largest retailer. The $10 price applies to pre-orders on Target.com of 10 select DVDs: “Star Trek XI,” “Night at the Museum: Battle of the Smithsonian,” “Harry Potter and the Half-Blood Prince,” “Angels & Demons,” “Four Christmases,” “G-Force,” “My Sister’s Keeper,” “Santa Buddies,” “Terminator Salvation,” and “Julie & Julia.” At the same time, Target implemented price cuts on hundreds of hot new toys from Fisher Price, Ni Hao Kai Lan, Barbie, LIV, Furreal, Star Wars, Ben 10, and Air Hogs.  For guests hoping to get a head start on the gifting season, November deals include over 400 price cuts, which began rolling out November 1. Many toys will be on sale for 50 percent off through Nov. 25.

Best Buy is making a pitch to draw in value-conscious consumers by offering a $250 computer, the cheapest laptop the chain’s ever sold. The Acer laptop, with a Intel Celeron 900 processor, 2 GB memory, and a 160 GB hard drive, went on sale in stores and online earlier this week.

Another electronics chain, HH Gregg, is rolling out its pre-Thanksgiving blockbusters tomorrow and Saturday from 10 a.m. to 9 p.m. Highlights include several Panasonic flat screen HDTVs, notably a  58-inch 1080p model with three HDMI inputs for $1,500, several hundred dollars less than we’ve seen elsewhere. If you’d prefer alternative to the models on sale, the retailer is applying extra discounts of $20 to $200.

The Great Recession: Where's the consumer's voice?

A report recently published by the not-for-profit Pew Research Center's Project for Excellence in Journalism reveals some interesting biases in the media when covering the Great Recession. For one, the report says that TV, print, radio, Internet and other news media focused an awful lot on players at the top–President Obama and his staffers, federal agencies, and business leaders–as opposed to folks at the bottom of the ladder, often suffering the most. The stimulus package, the banking bailout, and efforts to help the struggling auto industry were the dominant topics. Most coverage took place in New York and Washington, the capitals of finance and government, respectively. And when the stock market started to rise, coverage started to peter out. 

For that reason, I'd like to brag a bit about the monthly Consumer Reports Index, which asks consumers for their sentiment on the state of their own financial well-being. That includes not only what they spent and did over the prior month, but their spending plans for the next month. The index results are based on answers by a nationally representative sample. Stay tuned for the next index, about halfway through the month, for a unique gauge of what's going on close to the ground, not up in the vaulted realms of power.–Tobie Stanger

The case for extending the CFPA to auto financing

Consumers Union, publisher of Consumer Reports, has joined 37 other not-for-profits in a letter to House Financial Services Committee Chairman Barney Frank (D-Ma), recommending that oversight of consumer auto financing be included in the proposed Consumer Finance Protection Agency. The agency is one of many aspects of financial reform now before the House panel. Click here for a report on the not-for-profits' efforts and on their opposition.

The not-for-profits are in good company in supporting the agency. Recently, more than 70 professors of law and banking law signed a similar statement of support for the agency. 

For more on this important proposal, read our series of interviews with Elizabeth Warren, a Harvard law professor and fervent advocate for consumer finance reform.

Don't be victimized by fine-print thievery

“Free ring tones for your cell phone*” “Special prices on airline travel*” “Get full MSRP for your used car*”

You’ve likely seen or heard such offers in print and on TV, radio, and the Internet. They often come with lots of conditions, either in hard-to-read fine print or uttered by a fast-talking announcer.

While ads can use fine print or its verbal equivalent to elaborate on the details of an offer, major conditions and other gotchas should be made clearly and conspicuously. Companies that leave the devil for the details risk violating various federal and state laws. In judging an ad, regulators and courts look at whether the overall effect is likely to mislead customers acting reasonably under the circumstances and whether that deception materially affects the deal.

There are plenty of examples of companies’ failing that test.

• August 2009. The Federal Department of Transportation reached a consent order with United Airlines in connection with fares posted on the “special deals” section of airline’s Web site. The agency said the ads violated federal rules against unfair or deceptive practices because they used double asterisks and fine print to disclose that additional payments for taxes and fees were required, along with the purchase of round-trip travel. United must pay a must pay a $75,000 civil penalty.

• May 2008. The New York Attorney General announced settlements with four New York car dealers that advertised various offers, disclosing important details in “fine print or untenable disclaimers.” For example, one Suzuki dealer’s radio ad offered consumers a trade-in price of 100 percent of their vehicles’ manufacturer’s suggested retail price, but left it to a fast-spoken disclaimer to reveal that it would deduct 35 cents per mile on the odometer and, for cars more than a year old, impose an unspecified reconditioning charge. The dealers collectively were required to pay $32,500 in fines and clean up their act.

No tax bite on cash-for-clunkers vouchers

In case you were wondering, those vouchers of up to $4,000 to purchase a new car through the government's "cash for clunkers" program aren't considered taxable income to buyers. So it won't cost you anything on the 2009 federal income tax return you file next year.

For tax geeks, here's the language from the Consumer Assistance to Recycle and Save Act of 2009 (CARS): 

Sec. 1302 (h)(2)

FOR PURPOSES OF TAXATION- A voucher issued under the program or any payment made for such a voucher pursuant to subsection (a)(3) shall not be considered as gross income of the purchaser of a vehicle for purposes of the Internal Revenue Code of 1986.

For a change, good news from the IRS!–Tobie Stanger

Car dealers can use your drivers license to access your credit report

Considering all the time we spend fretting about protecting our Social Security numbers, this may come as a shock: Your SSN isn’t necessary for a car salesperson to surreptitiously peek at your credit report. He or she has the technological ability to unlock your file using only the information on your driver’s license.

“An auto dealership checking a consumer’s credit through TransUnion is not required to have the individual’s social security number (SSN) in order to submit the request,” says Steven Katz, a TU spokesman. Does the dealer need your permission to do that? “The dealer does not need ‘permission’; rather, it needs only certify a permissible purpose (such as extension of credit),” says Katz.

Equifax told us the same thing about the ability to get your credit report without your SSN, but stressed that anyone who pulls your file must get your permission to do so.

Experian did not respond to our query.

TransUnion prefers to get the SSN, because it more reliably helps locate your exact credit file, but it’s not absolutely necessary. The credit report access keys on the license are your name, address, and date of birth, all of which are essentially public information. The driver’s license number itself is not relevant, since the credit bureaus don’t use that as an identifier.

Car dealers commonly ask for and photocopy your driver’s license before they’ll let you take one of their cars out for a test drive, says Charles Cyrill, a spokesman for the National Automobile Dealers Association. If you encounter this situation and are worried that your privacy may be compromised, explicitly tell the salesperson that you are not authorizing use of your license to pull your credit report.

Consumer Reports Index: Credit card woes hurt consumer sentiment

Despite a rebounding stock market and promising economic indicators, consumers say they are feeling far worse about their finances than they have in the last seven months, according to the Consumer Reports Index for September.  Increased credit card, healthcare, and personal loan issues have contributed to stress levels, with 15.6 percent of Americans experiencing higher credit card interest rates and fees, and 8.5 percent losing health insurance or having their coverage reduced in August. 

On a positive note, consumer reactions showed the economy is no longer in freefall. Retail is stabilizing and consumers showed more interest in shopping for big ticket items like homes and cars. Employment improved significantly in August.  

The monthly Index—actually a composite of several indices—tracks trends in several areas of consumer sentiment, through responses from a nationally representative sample of households polled in August. Here are some of the key findings:

Consumers are facing more economic hardships. The Consumer Reports Trouble Tracker crept up to its highest level in the past seven months with almost 38 percent of Americans experiencing at least one major negative personal finance event in the past 30 days. For the sixth straight month, the ability to afford medical bills or medications remains the most prominent trouble Americans are reporting.

Lower-income households, earning less than $50,000 a year, were hurt most. In the past 30 days:

• 24 percent have been unable to afford medical bills or medications.
• 7.4 percent lost their job or were laid off.
• 12.2 percent lost or have reduced healthcare coverage.
• 14 percent missed a payment on a major bill (not mortgage).

Sentiment is declining. The Consumer Reports Sentiment Index is at the lowest level (38.1) since October ’08. When the index is greater than 50, more consumers are feeling positive about their situation. 

Small signs of life in shopping. The Consumer Reports Retail Index showed that purchasing in the past 30 days was up slightly for personal electronics and small appliances in the month of August compared to July, but flat for all other categories. Planned purchases in September are on par with August. 

Stress is up. When the Consumer Reports Stress Index is more than 50 consumers are feeling more stress than a year ago. It currently stands at 65.7, which is up from a year ago.

To read more about the Consumer Reports Index, including how it was conducted, click here.

Used-car history reports can't replace a good mechanic’s inspection

Relying on Carfax, one of our staffers missed damage to a bumper cover before buying a used Toyota Sienna. A dealer estimated the repair at over $1,000. (Click the image for a closer look at the bad bumper.)
[PHOTO: Consumer Reports]

A recent case involving one of our own Consumers Union staffers illustrates why a used-car history report doesn’t substitute for thorough, pre-purchase inspections by a mechanic and yourself.

The staffer decided to forgo a mechanic’s inspection and buy the certified used 2005 Toyota Sienna minivan based on a “clean” Carfax report. Months later, however, he discovered that a plastic fog lamp insert in the front bumper cover had fallen out, leaving traces of epoxy - obvious signs that someone had glued it in after it had fallen out once before. Checking more closely, he found that several plastic posts attaching the lower and upper parts of the bumper cover were broken.

Most likely, the previous owner resorted to makeshift repairs after driving the vehicle into a curb or other object. The dealer that sold him the vehicle denied knowing about the problem, which he said wasn’t covered by his extended warranty. And the full cost of a repair? A dealer quoted him more than $1,000.

Such a minor accident, though costly, isn’t likely to show up on a vehicle history report. Carfax and other providers rely largely on insurance total-loss records and, in some cases, police accident reports. A run-in with a curb wouldn’t likely generate either of those. And our recent study of used car history reports found that the providers sometimes miss even major accident damage that can leave a car little more than a rusting pile of metal.

As for our staffer, he says regrets not having the minivan inspected by a mechanic before he bought it. And he admits he should have done a better job looking over the vehicle himself. Had he done so, there’s a good chance would have discovered the damage before buying and avoided a costly repair. —Anthony Giorgianni

NY car dealers slammed for "cash for clunkers" fraud

Along with the concerns we wrote about yesterday in connection with the federal "cash for clunkers" program, you can add car dealer advertising fraud.

New York Attorney General Andrew Cuomo recently announced that he has issued cease and desist orders to nearly 40 dealers statewide. Cuomo has accused these dealers of using misleading and deceptive advertising in connection with the federal Car Allowance Rebate System (CARS) program.

Cuomo said the ads omitted significant requirements for program, which provides a credit of up to $4,500 for anyone who trades in a federally-designated gas-guzzling clunker for the purchase or lease of a qualifying new vehicle.

A statement from Cuomo’s office said that the ads “mislead consumers into believing that their trade-in vehicle qualifies for the program when it does not or that they are eligible for a several-thousand-dollar rebate, when they are not.”

The Cuomo action underscores the need for anyone considering buying a new vehicle under the program to research the requirements before going to the dealership. 

For a trade-in to be eligible, it must be EPA-rated at 18 mpg or less. Check the fuel-efficiency rating for your old vehicle, as well as the new ones you are considering. Learn more about the "cash for clunkers" program by visiting the federal government’s CARS Web site and the Consumer Reports CARS resource center.–Anthony Giorgianni 

Don’t get snookered trading in your clunker

With a federal credit of up to $4,500, the "cash for clunkers" program is providing a big incentive for consumers to trade in their gas guzzlers for the purchase or lease of a new fuel-efficient vehicle. But don’t let all the excitement leave you paying too much, choosing a car you really don’t want, or even ending up victimized.

• Watch for scams. The Better Business Bureau reports that even before the Car Allowance Rebate System (CARS) was passed by Congress, federal authorities found Web sites soliciting consumer names, addresses and Social Security numbers, all on the pretext of registering people for the program. That information could be used to steal your identity or apply for credit in your name. Keep in mind that you don’t need to register or obtain a voucher. A CARS participating dealer will do all the necessary paperwork for you. 

• Avoid contingency agreements. The U.S. Department of Transportation’s CARS Web site is advising car buyers not to asign so-called contingency agreements, promising to reimburse the dealer if the federal government rejects the credit for their purchase. Some dealers are asking customers to sign such a promise, the agency said. Also, dealers must allow you to take your new car immediately. Some are holding onto the vehicle until the CARS application is approved..

• Don't pay too much. Seeing growing demand and smaller vehicle inventories, dealers may resist consumers who attempt to negotiate great deals. That’s especially likely once the CARS program again begins running out of money. Estimates are that current funding should last through Labor Day. 

To make sure you’re getting a good deal, discover the available incentives and even find what other buyers are paying. Consumer Reports car price reports and new car buying kits can provide detailed pricing information to empower negotiations, including dealer holdback, hidden dealer incentives, and rebates. The free TrueCar site provides recommendations for good and great prices based on what others are paying for specific models nationally, regionally, and in your local area.

• Don't buy a bad car. Finally, don’t let the prospect of a CARS credit pressure you to settle for a vehicle you don’t really want. That might happen as inventories for the most reliable, fuel-efficient, and top-rated vehicles decline because of CARS-driven demand. If necessary, forget the credit and wait until a dealer has something worth owning or leasing. It may be a short wait, as 2010 models are arriving this month. As demand declines after the CARS program ends, there should be plenty of good deals to compensate.

For more information about the program, visit the CARS Web site or Consumer Reports Cash for Clunkers resource center.–Anthony Giorgianni