Holiday tipping advice for 2009

In what's becoming an annual tradition around here, we've posted our holiday tipping advice for 2009, based on surveys conducted by the Consumer Reports National Research Center. 

Alas, for those on the receiving end, it looks like tips may be a bit smaller this year. 

For tip givers who feel a need to cut back, one way to sweeten your generosity is to tip a little earlier in the season. Your recipients may appreciate it — they probably have people to tip, too.

Some other no-extra-cost tips:

• Crisp new bills from the bank will seem more special than wrinkly old ones out of your wallet.
• A handwritten note is nice too.
• And if possible, try to deliver your tip in person.

If you have ideas to share, either as a tip giver or recipient, we'd welcome your comments.

Walmart's return policy goes underground?

When we recently blogged about Target’s decision to expand its return policy, we chided the retailer for not providing complete details, either online or in its stores. (Customers now can make up to $70 in non-receipt returns in a 12-month period, and the retailer allows for even exchanges without a receipt).

We suggested that Target compare its disclosure with Walmart, which we said is much more open about its policy, which is friendlier than Target’s

One reader responded by saying that the Walmart disclosure we pointed to online was nowhere to be found. So we went back and looked again.

It turns out that the Web page describing  Walmart's consumer-friendly in-store return policy still is available . The problem is that, unless you know the exact URL, there no longer seems to be any way to find the page. Now when we click on the “Returns Policy” link, we find no mention of Walmart’s policy for non-receipt returns for purchases either online or in its stores.

A representative in Walmart’s communications department told us that the returns policy page had been rewritten to make the policy less confusing.

Well, we weren’t confused before. But we are now.

The representative promised to check into whether Walmart could restore the link to the page that fully describes its liberal returns policy, which she assured us is still in effect. After weeks of not hearing back, we called again last week and were assured by yet another communications representative that the retailer would get back to us. So far, no word. So we’ve decided to give up on waiting for the Walmart’s non-communications staff to get back to us.

All we can say is it looks like Target isn’t the only store keeping a secret. (If we do ever hear back from Walmart, we’ll post its response.)—Anthony Giorgianni 

It's wise to look a gift card in the mouth

Nearly half of American polled in our recent Consumer Reports Holiday Shopping Poll said they expected to purchase gift cards for families and friends. It's no wonder: They're a nice proxy for cash, and perfect if you don't know what else to give. They're also a useful as a tip for folks who provide service to you year-round.

Gift cards have their drawbacks. American Express recently rescinded monthly fees on its gift cards in time for the holidays, but retained other fees. Other issuers still may require fees and expiration dates. The Credit CARD Act of 2009, scheduled to become fully effective in February 2010, would prohibit gift-card fees for at least one year after purchase, and prohibit expiration dates earlier than 5 years. (The Senate has yet to approve legislation passed last week in the House that would speed up most aspects of that law to December 1 of this year.)

Fees and expiration dates notwithstanding, gift cards have additional drawbacks, in terms of how they're used. Listen here to Tightwad Tod and be forewarned!

Cash for unwanted electronics

Looking to get rid of an old computer, digital camera, or MP3 player? Sears just launched a new trade-in and recycling program that allows customers to exchange unwanted electronics for gift cards redeemable online or in stores.

Here’s how the program works:

Log onto sears.gazelle.com, where you’ll be prompted to enter brand and model information, indicate whether the device works or is damaged, and answer questions about condition and the presence of various accessories. In the case of personal products like MP3 players, you’ll also need to reveal whether the gadget has been monogrammed (which decreases the value).

Once you’ve provided the information, click ‘calculate,’ and up pops the trade-in value. A Nintendo Wii gaming console, for example, in perfect condition with all of its accessories, is worth $102. In poor shape, it’s worth just $20.

Other products eligible for trade-in include cell phones, PDAs, video games, movies on DVD, camcorders, GPS systems, Blu-Ray players, satellite radios, camera lenses, calculators, and home-audio gear.

In partnership with Gazelle, a dedicated gadget buy-buyback company, Sears offers free live chat support and pledges to wipe all items clean of personal data as part of its inspection process.

If you’re satisfied with the offer, the company will provide free shipping and packaging to return the equipment. You’ll get your Sears gift card in a week or so. Sears will also accept for recycling electronics items that no longer work. Recycled items, however, have no trade-in value.

As a special holiday promotion, Sears says participants will receive a 5 percent bonus over the actual trade-in value through Dec. 31.

CR Index: 25% to spend more on personal electronics

A quarter of Americans–24.9 percent–expect to spend more this month on personal electronics, according to the Consumer Reports Index, a composite of five indices measuring consumer behavior, attitudes, and consumption patterns. And short-term plans to purchase major home electronics rose slightly, to 10.7 percent from 10 percent in October, the highest level since June.

In addition, perceived financial problems, including difficulties making credit-card payments and covering medical bills, may be stabilizing, according to the Consumer Reports Trouble Tracker and Stress indices, two components  of the Consumer Reports Index. In the West and South, survey respondents reported fewer troubles in early November than in the prior month. In the Midwest, perceived troubles appeared to be slightly (up 2.4) worse. Northeasterners’ opinions stayed about the same.

Those optimistic results are the bright spots in a report that generally shows consumer plans and attitudes at a slow simmer. Two weeks before the official start of the holiday shopping season, planned purchases were flat or lower in most categories, including appliances, yard and garden goods, cars and homes, according to the Consumer Reports Next-30-Day Retail Index. (The survey underlying the Index was completed before Congress extended and expanded a one-time $8,000 tax credit for new-home buyers.)

Ed Farrell, a director of the Consumer Reports National Researcher Center, which created the Index, posed a cautionary note. “The economy remains in a precarious position where further decline is possible but is slightly less likely,” Farrell said. “Unless consumers can see concrete improvements in their lives and retail activity picks up, any near term recovery is improbable.” 

For more details and information on how the Consumer Reports Index is conducted, click here.

Considering a layaway purchase? Read this

Last year at this time, Sears and Kmart helped consumers rediscover the old-fashioned concept of the layaway purchase, in which shoppers make periodic payments to a special account to save up for big-ticket goods and take them home only after they’re paid for in full.

With so many Americans still struggling financially and reeling under credit-card debt  -- our recent holiday poll reveals that an estimated 13.5 million consumers are carrying debt leftover from last Christmas – layaway is likely to be an even more attractive alternative to pay for gifts this holiday season. Beside Sears and Kmart, major retailers offering layaway plans include Toys “R” Us, Babies “R” Us, TJ Maxx, Marshall’s, and Burlington Coat Factory.  Layaway is also available for many online purchases through third-party firms like eLayaway, which has an affiliate relationship with more than 1,000 merchants such as Best Buy, Bass Pro Shops, Apple Store, and The Home Depot.

If you’re unfamiliar with the layaway process, here’s how it works:  You enter into a contract and make an initial deposit based on a percentage of the purchase price, along with a service fee to administer the plan and keep the item in storage. There are no interest payments, since you don’t actually take possession of the merchandise until you’ve paid for it.

Like any transaction, you can avoid potential pitfalls by doing some preliminary legwork. Toward that end, the Better Business Bureau just released a checklist of key questions to ask before opening a layaway account:

• How much time do I have to pay off the item? The usual timeframe is usually 30 to 90 days.

• What’s the minimum down payment? Ten to 20 percent is common.

• When are payments due? After the initial down payment, some contracts require additional contributions weekly or every two weeks; some let you make payments whenever you want during the timeframe.

• Are there storage or service-plan fees? Kmart charges a flat $5; Toys “R” Us has a $10 fee.

• What happens if a payment is missed? Are there penalties? Does the item return to inventory? If you miss a payment or fail to pay the minimum due, you might have to double up on your next scheduled payment.  At some stores, the merchandise is returned to the shelf as soon as 7 days after a missed payment.

• Can I get a refund or store credit if I no longer want the item after making a few payments? Cancellation fees typically range from around $5 to $10. At Burlington Coat Factory, layaway deposits and payments are non-refundable, but may be converted to a gift card if layaway is cancelled. In addition, the company won’t give you a refund if you decide to return an item you’ve paid for in full, only a gift card.

• What happens if the item goes on sale after I’ve put it on layaway? Kmart won’t make any price adjustment after 7 days from the date you open a layaway account. Sears gives customers a 30-day window.

• Get it in writing. Don’t take the salesperson’s word for it. Ask for the complete terms and conditions in writing. And be sure to keep detailed and accurate records of all payments made.

Layaway plans aren’t specifically regulated by Federal law, although the Federal Trade Commission can go after a company for unfair or deceptive practices. Click here for information about filing a claim. Check with your state attorney general, local consumer protection agency, or the local Better Business Bureau  to find out if state or local laws cover layaway purchases.

 

Ready or not, here come the holidays

Although the Halloween decorations may still be tacked to the door and most of us haven’t thought about our Thanksgiving menus, it’s not too early to begin talking about holiday shopping and everything that goes with it – the traffic, the crowds, the long lines, and the deals.

 As you may have read here on the Money blog last week, the results of our first holiday poll, designed to gauge what Americans will be buying this season, how much they’ll be spending, and whether the ongoing economic crisis is dampening their festive spirit, indicate that 2009 is likely to be a carbon copy of last year.

Once again, consumers said they plan to cut back this season. Sixty-five percent of those polled, in fact, said they intend to do less traveling, entertaining, and spending on gifts. That’s on top of the three-quarters of consumers who told us last year they planned on tightening their belts.

It’s easy to understand why so many consumers continue to watch their wallets. Statistics released today by the U.S. Bureau of Labor Statistics reveal that the unemployment is at its highest since April 1983. In October, unemployment rose from 9.8 percent to 10.2 percent, as the ranks of the nation’s out-of-work force swelled by 558,000, to 15.7 million. In retailing alone, more than 40,000 jobs were lost last month.

Despite the grim statistics, Americans remain largely optimistic. Eighty-seven percent of survey respondents said they expect to be at least as happy this holiday season as they were last year; 33 percent are predicting they’ll be even happier. So hope does spring eternal.

While we can’t do much in the cheer department, we can offer advice on how to take advantage of the latest retailing trends in order to stretch your shopping dollars. And that’s what we’ll be doing over the next couple of months. The results of our second poll, due out soon, promises to offer insights into the nation’s shopping habits – the extent to which the Internet is figuring more prominently in our purchasing plans, where consumers think they’ll find the biggest bargains, and the must-have presents on their Black Friday shopping list. We’ll also be identifying the most annoying aspects about holiday shopping, also based on a nationwide survey.

As you put together your shopping list, here are a few tidbits to keep in mind, based on a closer look at the results of our first poll:

 • Gift cards. They’re one of the most popular gifts to give and receive, yet one of four recipients still haven’t used at least one of the cards they were given last year, mainly because they couldn’t find anything they wanted to buy.  Moreover, 65 percent of those who used their gift cards – especially women -- purchased an item that priced in excess of the card’s face value. That explains why retailers push card sales so aggressively.

 • Who doesn’t like clothes? Clothing is the biggest holiday gift category and, like gift cards, people love to give and receive apparel. But survey respondents told us that clothing also tends to disappoint the most. If you want to be a hero for the holidays avoid giving socks, shirts, sweaters, and ties, the least desireable of garments and accessories. Also making the most-reviled list this year for the first time: slippers.

 • New favorites. Most people tend to give and get the same presents year in and year out. But our poll revealed several new items that made the list of gifts respondents said they’d be thrilled to receive: boots, purses, pajamas, and guns. The latter’s not a typo, and we’ll avoid making any value judgment. We’re just reporting the facts.

• Fewer people are planning to give money. Despite the fact that money ranks behind only electronics and gift cards as the present they’d most like to receive, Americans won’t be opening their wallets as wide this season. Only 44 percent are considering giving a cash or check this year vs. 61 percent in 2008.

 • Women more likely to scale back on gifts to others. Here’s a statistic we didn’t see coming. When asked whose gifts do you plan cutting back on to save money, women were more likely than men to target family (including their children), friends, co-workers, and service providers (hair stylist, deliver person, etc) instead of themselves. Men, on the other hand, more willing than women to cross teachers and the family pet off their lists.

Holiday regifting: How to do it right

Consumer Reports Holiday Shopping Poll recently reported that this year, 36 percent of Americans plan on regifting–that is, giving a gift they received to someone else. That's up from 31 percent the year before. Our own Tightwad Tod discusses the phenomenon here. 

If you think you'll be among that population passing on the wealth, consider these tips, adapted from Regiftable.com, a Web site sponsored by Money Management International, a not-for-profit credit-counseling service: 

•Ensure the gift is something you really can give again. Handmade or one-of-a-kind items are taboo for regifting. Same for signed books and monogrammed items. Appropriate goods might be bottles of wine, unopened boxes of candy, new household items and inexpensive jewelry. 

•Check the condition. Give only new, unopened packages.

•Consider the gift's desirability. If you don't like it, do you really think someone else will?  

•Think: Can you get away with it?  Make sure you don't give back the gift to the giver. Regift to folks unlikely to see or know the original giver. And consider whether you can keep the secret, without guilt.

•Wrap it up nice. Use new wrapping paper and a new card or gift tag. Only reuse gift bags in good condition.

•Explore other options. You also could donate the gift to a charitable group's thrift shop or holiday gift drive. Assuming you know its value, you could get a tax deduction in the deal, as well.

Avoiding post-holiday debt: Don't be among the 13.5 million!

This holiday season, it may be more important than ever to avoid impulse buying that leaves you with a holiday debt hangover in the New Year. A survey we conducted in early October showed that six percent of adults, or roughly 13.5 million consumers, were still saddled with debt from last year’s holiday spending.  

Odds are you’ll be paying especially hefty finance charges this year if charging a lot of gifts leaves you carrying a balance on your cards. That’s because many banks are jacking up rates or imposing other finance charges in the form of annual fees before their ability to do so is crimped by federal credit card reform rules that become effective in February. For instance, Wells Fargo recently notified cardholders it plans to raise interest rates by 3 percentage points starting Nov. 30, while Citibank in late October hiked rates for many of its customers to 29.99 percent.

The good news is that many consumers already are making progress in slashing their card debt. A recent Consumer Reports survey found that more than a third of consumers polled said they had paid off and closed a card account this year.  And the Federal Reserve’s latest monthly Consumer Credit Report showed that revolving credit, which is largely card debt, decreased at an annual rate of 13 percent in August, to a total of  $897.6 billion. That’s down from $988.2 billion at the end of 2008.

Tightwad Tod offers some helpful tips on how to avoid holiday debt headaches here.-Andrea Rock

In holiday cutbacks, pets fare better than husbands

A survey on holiday shopping plans released this week by Consumer Reports found that among folks considering trimming their holiday spending this year, women were more likely to cut back on giving to their spouse than to the family pet. Twenty-two percent of women who expected to reduce holiday spending said they'd be spending less on their spouses. That compares with 14 percent planning to trim the fat on Fido's bones. Men, on the other hand, were more even-handed; about the same percentage were willing to cut back on their significant other (17 percent) as on their pet (19 percent).

Perhaps women favor their pets in gift-giving because a cat won't sigh heavily and roll its eyes after getting slippers instead of a GPS. To ensure you've got more left over in your pet budget for the fun stuff, check Consumer Reports Money Adviser's advice on saving on pet expenditures. And here are some tips on buying pet toys. Check this blog next week for more results from the Consumer Reports Holiday Shopping Poll.—Tobie Stanger