By Herb Weisbaum ConsumerMan
msnbc.com contributor
updated 11/29/2007 4:23:04 PM ET 2007-11-29T21:23:04

You shop all year long. So why do you need tips for being a smart holiday shopper? Because this is power shopping, done at the most hectic time of year. When you are tired and in a rush, it’s easy to make costly mistakes.

Whether you shop online or at a retail store, you need to do your homework. You want to be sure you are buying a reliable product at a good price.

These seven tips should save you time and money and prevent needless aggravation.

1. Beware of holiday hype
This is the time of year when everybody offers the lowest price – or at least that is what they want you to think. A common marketing trick is to boast about the deep discount you are getting off the list or regular price. But most places don’t charge list price.

The store may be “slashing prices” and offering “huge savings,” but all that really matters to you is the bottom line: How much does it cost?

2. Research and save on the Web
Even if you don’t plan to purchase online, the Web makes it easy to compare models. The manufacturer’s product descriptions always sound wonderful. You want to read professional reviews and consumer reviews.

“Many times reviews from individual consumers who actually own the product are much more insightful,” says Edgar Dworsky, founder of Consumerworld.org, “because they didn’t just play with it for an hour or two, they’ve been living with it.”

Check what people are saying on shopping message boards, such as Epinions.com and avsforum.com (for audio & video equipment), plus read reviews posted on online retail sites.

Use a few of the many shopping bots to see how much various stores are charging for the item on your list.

Some of the better-known bots include: Shopping.com, PriceGrabber, BizRate, DealTime, Shopzilla, Yahoo! Shopping, and mySimon. Remember: The best price is not always listed first. Some retailers pay bots to put them at the top of the results page. If possible, sort the list by price.

To download coupons visit: FatWallet, DealTaker, CouponCabin, MyCoupons, Ebates, and Wow-Coupons.

3. Check the return policy before you buy
Most retailers extend their return and exchange periods for things purchased in November and December. Even then, the time frame differs from store to store, and it also may be different from item to item.

There may also be a different return policy for merchandise bought from a company’s Web site than from its brick and mortar store. And don’t assume you can return an item purchased online to a walk-in store. Some e-tailers make you ship the product back to them at your cost, even if they have a physical store in your area.

In general, return policies are getting more restrictive, especially when it comes to receipts. So keep those receipts. They will prevent headaches.

Many stores now have restocking fees – and not just for electronics – if the box is opened. You don’t even have to use the product, just break the seal and you could get hit with a 10 to 25 percent restocking fee. That’s because the item can no longer be resold as “new” merchandise. Buy a $300 camera and a 15 percent restocking fee will cost you $45. So make sure you really want that gift before you open the box.

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.”

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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