Tag Archives: Walmart

Walmart Used Car Sales

Since you can buy pretty much everything at Walmart, why not a used car? Yes, Walmart is now in the car business. It started last year in the U.S. with 14 locations in Dallas, Houston and Phoenix and went so well, it’s now rolled out to 250 stores. It’s called Carsaver and lets you buy at an instore kiosk, a downloaded app or a dedicated website at carsaver.com

Walmart’s Carsaver doesn’t actually compete with used car dealers since you take delivery at the dealership. But they do claim to save buyers $3,500 and another $3,900 with their lifetime no mileage restriction powertrain warranty. Let’s hope that something else that starts in the U.S. and does come to Canada.

I Was Inspired, I Messed Up, I Was Surprised, and Have An Idea

I was inspired: On December 7th, someone walked into the Walmart in Bedford, Pennsylvania and dropped off a bank draft for $46,265. It was an anonymous Christmas present in paying off 194 layaways at the store. Clearly, layaways are done by people who can’t afford to pay the full balance of something at the time and thus pay it in small installments before taking possession. It’s not the first time this person has done it, and sure made the Christmas of 194 people.

I messed up: We all know better, but make the number one rookie financial mistake, so I’m not alone. I was in a national retailer last week and saw AAA batteries on sale at 50% off. Half price for a package of 10. I grabbed them, paid, and left. The next day I was at Home Depot and saw the same brand of AAA batteries at the same sale price, but a package of 48 and not 10! YIKES. The first chain’s 50% off may have been legit, but they were still charging 480% more than Home Depot! How often do we look at the 50% off sign and buy without having a clue if it’s a good price or not! I did return the first ones, but it was a good lesson to learn over and over again: It’s the price you pay, not the discount you think you’re getting!

I was surprised by a survey last week that found 63% of us admit to re-gifting something. I think it’s probably way higher, but at least a lot of us are prepared to admit it. I’m in that group and there’s nothing wrong with that. If it’s a gift that you don’t need or want, it’s new, and it’s something another person would really enjoy, why not? Plan B would be to throw your gift out or give it to the thrift store and then buy the same thing again at retail price? That’d just be dumb…

And my big idea for the week will work great if you have young kids. Change one of the names of your friends in your phone to read Santa. Then have the person send you the odd text asking how the kids are behaving. I bet it’ll work like a charm…maybe even year round…

How the Rich Spend Their Money..and Go Bankrupt

 

If you’ve ever wanted an insight into what rich people do with their money, here it is. It’s a research report from Personal Capital of over 50 NBA players. In some ways, they’re not so different from you and me. In other ways, you definitely don’t want to emulate what they do!

The average income is around $45,000. THAT is roughly what the average NBA player SPENDS in a month! But then, the rookie entry salary in the league is $4.7 million. But let’s see what they spend that half a million on every year:

11% goes to clothing and shoes – their biggest trackable expense category.

9% is automotive – even though most of them likely get a free vehicle from a dealership in return for some endorsements.

8% is travel – after all, it’s a long off season, and they like to travel in style, and to 5-star hotels and resorts, which isn’t cheap.

Restaurants eat up 7% of their spending. That’s around $35,000 a year, which will get you some great meals, even if you’re picking up the tab for others in your group.

Sadly and surprisingly, 7% is also what they donate to charities. That’s kind of a puny percentage for an income of more than five million bucks if you ask me.

5% goes to a category called service charges and fees. It’s kind of obvious here that over $25,000 of fees means they’re really not very financially literate, and certainly don’t shop around at all.

The one place they do seem to want to save money is shopping at Walmart. Yes, the average NBA player shops there, too – to the tune of over $45,900 a year!

But here’s where you want to be very different than an NBA player: Over 78% of them go bankrupt within two years of retiring from pro basketball. We spend what we make – that is: we spend to the amount of our pay. That’s not a good idea for us middle class earners or millionaire income athletes.

Yes, there are stories of pro athletes who are incredibly great savers and literally don’t spend a dime of their salary. But for every one of them, there are dozens who crash and burn. Vin Baker made over $100 million in his career and last month started a job at Starbucks to support his four kids. For millionaires and ourselves: Spend what you want, but only AFTER at least 10% comes right off your check, or out of your account, to pay yourself first.

Walmart Wants to Stop Taking Your Visa?

Walmart, the worlds’ largest retailer announced last week that they’re kicking out Visa in Canada. But I doubt that’ll happen.

Walmart claims they pay over $100 million in merchant discount fees. Those are the fees charged by credit card issuers when you use your credit card for payment. These amount of these fees depends on how much business a retailer does on credit cards. With MasterCard, for example, it’s as low as 1.26% when there’s $3 billion in business a year. Mine, on the tiny business side is 2.75% with Square.

There are over 72 million Visa and MasterCards in Canada, according to the Canadian Bankers Association. Ballpark, 60% are Visa cards, so I doubt this will come to pass. I just can’t see it happening. The average credit card charge in Canada is $103 and the typical Walmart customer isn’t likely to just switch to using their debit card, instead. The “no more Visa” plan is supposed to start rolling out July 18th in Thunder Bay. OK, they didn’t exactly pick the city with the largest volume business in the country. And they made it effective six weeks out. That means we’ll just have to see who blinks first: Visa in lowering the fees for Walmart, or the retailer in realizing this isn’t a winning idea.

Five Things I Didn’t Know

In Miami, I recently saw the future of Best Buy, if they do survive. It was in a mall and they called it Best Buy Mobile. The store was about the same size as a typical cell phone store in every mall: Displays down both sides and a counter at the back. All the apple and phone products, ear buds, and the 90% of gadget stuff that fits into your hand. No more 35,000 square feet stores…

Singer Nicki Minaj recently had her social security number hacked and posted online. The rapper’s credit score dropped over 100 points almost immediately with a wave of inquiries into her credit report. Your credit score sets your borrowing interest rates. If you apply for credit at a bunch of places for different things, it’ll drop your score a lot and then your current line of credit or credit card rates may go up as a result.

At least some of the banks aren’t playing the delay game anymore with making online bill payments. They used to take two or three days to forward the money to the company you were paying. But recently I made a payment to Amex one night and had their email confirmation of receipt before 8 AM the next morning. Now if they could just cut down the average two weeks time it takes them to transfer out investments and RRSPs!

Walmart is the world’s largest retailer. When you’re that big, you measure efficiencies in pennies and seconds. I was in the U.S. recently and had my credit card out while the cashier was still ringing up my purchases. She told me to swipe my card. But she hadn’t rung everything through! I didn’t matter. In order to avoid the two or three seconds it takes to make the connection and get the approval on the credit card, their system does the connecting before they have the total amount. When the cashier hits the total button, the system just needs to match the amount without the wait for the swipe and connection. Yes, to Walmart – seconds matter at millions of transactions an hour.

Considering buying an electric car? If so, hold off. I hadn’t considered that a few years ago, there was a huge wave of leases to boost sales. Those leases expire next year so you’ll be able to get an incredibly great deal on a three-year old!

And the best ‘I didn’t know” has to be the stupidity level of some crooks.In Jacksonville, Florida, a crook went into a bank to cash a cheque for $368 billion. Yes – billion! Imagine his surprise when they called the cops, instead of handing him maybe a hundred suitcases of cash…

Guaranteed Lowest Price & Your Facebook Friends Set Your Credit Rating?

Do you want a way to guarantee you’ll get the lowest price on whatever you buy?

There are now a number of apps called showrooming…but for the U.S. only right now, and that comparison won’t help you, but only frustrate you.

The perception or reality is that Walmart isn’t considered the lowest price retailer anymore, and that’s something they want to correct! In nine cities they’re now testing something called Savings Catcher. You just need to enter your receipt number online. Just the receipt tracks everything you’ve purchased anyway. If Walmart finds another retailer with a lower price, they’ll immediately refund the difference to your credit card. Unless you live in San Diego, Dallas, or one of the other seven test cities, you’ll have to wait quite a while to sign up for it, though.

Should your credit rating be partially determined by who is your friend on Facebook or on LinkedIn? Another lending site called cabbage has now started using social media to determine your credit score. Yes, who you have as friends on Facebook can impact whether you get a loan or not. In the old days, your banker used to know you – character was a part of the decision making processing. These online lending sites have found that the chance of someone going past due is reduced 20% with a good social media score. It sounds wrong and stupid, but they think it matters and works. So somewhere down the road – be careful who you friend on Facebook.

When Is A Sale A Deal?

I was wondering the other day when a great deal is really a deal? Is it only when it’s on sale, or when it’s priced right, even without a so-called sale? How conditioned are we that it’s only a deal if it’s advertised at 25, 30 or 40% off?

What got me thinking was trying to buy a TV for my brother at Future Shop. Tuesday two weeks ago, the one I wanted was $319 – I just didn’t have the room in my car. Two days later, when I was a buyer, it was in the flyer and $20 higher! It was now an advertised deal, but at a higher price. When I asked the salesman what the story was, the response he gave me was that “that happens all the time.” There was more to his explanation, but I had already stopped listening.

Chevy in the U.S. has now started something called Total Confidence Pricing. It’s another attempt to get away from rebates and temporary sales such as employee pricing, clearance, or the likes. In Canada GM has tried that two or three times in the last decade or so. How successful will they be this time around when other manufacturers advertise so-called sales? Saturn was based on that concept and never did get much market share with their one price and no haggling and…well, they’re gone.

The giant retailer JC Penny, roughly equivalent to our Bay, last year went to something called everyday value pricing. No more screaming deals for the day or the weekend. They are trying to emulate WalMart-type pricing. As of now, it’s a total failure. Sales were down 19% in the last year and another 21% in the last quarter which just ended. For a retail giant, that’s staggering and frightening. Honest and fair pricing all week and all month isn’t working. Their new CEO is from Apple, but I’m not sure he can turn around a 102 year old company.

We’re not that interested in fair pricing it seems. While the deals at JC Penny, Saturn, and maybe Chevy were fair and good, we want the SALE sign screaming at us. We’re suckers for a sale. As long as it says 40% off, or has a $2,000 rebate, we’re all excited and pull out our credit card, or want to know where we can sign up for the financing. We don’t really know if that’s now a good deal or not, but that sign sure makes us buy.

Three Things I Didn’t Know

Wal-Mart, the world’s largest retailer has their own MasterCard. That’s something probably everybody knows as we keep getting pitched at the cash register. But I didn’t know that it is handled by Wal-Mart Canada Bank. Yes, Wal-Mart is a bank, something they got approval for in 2010. As of now, it isn’t a deposit taking institution but I wonder if they’re still working on that.

Virgin Money is Sir Richard Branson’s bank. Branson is best known for Virgin Air, Virgin phone, etc. He isn’t in Canada, but keeps talking about it, mostly because our pathetically small number of banks that automatically mean zero competition and huge fees and interest charges. I would love to have him come to Canada.

The one thing you know about Bronson is that he enters industries and everyone gets very nervous. Because Bronson is a huge believer in customer service and always approaches businesses from a totally different business model perspective. One of the features of Virgin Money is that it has facilities to quarterback family and friends’ loans. If you’re making a loan to a family member or someone you know, Virgin Money will do all the set up, paperwork, contracts, filing, signing and collections. I am absolutely dead set against family loans, but anyone who ignores me would have a great formalized way of doing it.

With new credit card legislation a couple of years ago, card issuers can’t increase your credit limit without your consent. Remember that their main goal is to have you owing the most amount of money and making the smallest payments. THAT is how they maximize their interest income.

These days, you’ll get a notice on your statement that you qualify for a limit increase – you just need to call. Or they’ll send you a separate mailer, and may even phone you from their call centre. Don’t do it – unless your limit is really low, it generally becomes more temptation.

What I didn’t know is that the trend of getting you out of the bank and to the ATM machines is changing. Think about it: They can’t solicit or sell you if they can’t see you!

When I was at one of the big no-service banks last week, I overheard the teller next to me tell people: My screen just showed that you qualify for a limit increase on your card. Want me to go ahead and put that through? Is that clever or what? And in the few minutes I was there, this teller was three for three. She converted all three people she asked to a higher limit. Great for the bank…often not so great for the person thinking they’re being flattered.