Stacking Up on Sales

Over the weekend, a friend took me to a massive tent sale. The concept was simple – the company rents parking lot space, puts up a huge tent and offers everything from shoes to apparel to household items for 50% off.  The sale occurs every 6 months and, from my understanding, all products are either excess manufacturing inventory (the company made too much) or retail closeouts (they didn’t sell enough). Still, it’s all new stuff.

On the way to the sale, my friend said he likes to ‘stack up’ on these events to save money in the long run. For example, he will buy multiple pairs of shoes during the sale to avoid buying them later. In theory, ‘stacking up’ makes sense but, in practice, it’s dangerous. Here are a few concerns I have about ‘stacking up’ during big sales:

• Going Over Budget – Was it in your budget? Unless you’ve planned for the sale, you will likely go over your monthly budget while stacking up. It seems justified but you’ve taken yourself off course for a perceived future benefit. Moreover, if you’re using a credit card to cover the excess spending, your interest charges will erode the savings.
• No Controls – So when do you know you’ve bought enough? The combination of a big sale and the “I will need this later anyway” is a slippery slope. Your budget gives you boundaries for spending. During these events, you can justify removing the boundaries so be careful.
• Invisible Long Term Benefit – So when do you see the benefits of stacking up? In theory, there should be a future month when you spend less because you’ve already purchased the items during the big sale. In reality, space in budgets always gets filled. Try defining a month where you’ll make up for the excess spending.

Don’t get me wrong, I love big tent sales and 50% off. At the same time, I’m cautious of ‘stacking up’. The best way to take full advantage of these events is to set aside a small savings account that is only used for big sales (similar to a vacation fund or college savings).   Contribute to the account each month in anticipation of the next event and enjoy spending when it happens.

What are your thoughts on ‘stacking up’? What do you think is the best strategy for taking advantage of these major sales events?