Seven Crafty Christmas Cons!

With Xmas a mere four weeks away, be on the lookout for these festive fiddles and seasonal swindles.

At this time of year, I become something of a grumpy old man -- think Ebenezer Scrooge, the villain of A Christmas Carol by Charles Dickens. Although I'm not a cold-hearted miser in the Scrooge mould, nevertheless, I'm always shocked at the unchecked commercialism in evidence each Yuletide. Indeed, according to banking payments association APACS, we Brits will splash out a total of £53 billion over the Christmas period. This comes to £2,120 for each of the UK's 25 million households, which is a staggering amount. What's more, during this yearly spendfest, we are at a high risk of being ripped off by profit-hungry manufacturers and retailers. Here are seven seasonal swindles to watch out for: 1. Christmas hampers Every Christmas, newspapers and magazines are full of adverts for Xmas hampers. The problem with these hampers is that the contents cost far more to buy as a package than they would to buy separately. In other words, you're paying, say, £30 over the odds for some nice packaging, plus a wicker basket which you could buy for a pound or two in a charity shop or boot sale. And don't forget the over-priced delivery charge on top! 2. Extended warranties Sales of electrical appliances and electronic gadgets soar at this time of the year and, as a result, so do sales of rip-off extended warranties. Following an investigation by the Competition Commission, the rules governing extended warranties were stiffened in 2005. Alas, there's been almost no improvement since then, and these contracts are still hugely overpriced. Until a few years ago, these warranties were written as insurance policies but, these days, most are `service contracts'. Typically, they extend the manufacturer's one-year guarantee to three years. However, the cost of these extra two years of peace of mind is steep -- it can add up to £40 to an item costing £100. On the other hand, special praise goes to John Lewis for offering free five-year guarantees on certain electrical items, and to audio-visual retailer Richer Sounds for selling the best-value extended warranties on the high street. 3. Games-console shortages Every year, it seems that there is a shortage of whichever video-game console is in vogue at Christmas. Instead of gearing up their production lines in order to take advantage of booming consumer demand, it almost appears that manufacturers deliberately choke off supply to the UK. Predictably, this year's must-have games console, the Nintendo Wii, is selling out across the UK, so prices are rising. For example, I've seen Wiis advertised on auction websites for twice the recommended retail price. However, you'll find plenty of reasonably-priced Wiis on French and German websites, which is taking the Wii! 4. Greetings cards How much for a piece of cardboard with a pretty picture on, plus an envelope? Twenty pence? Thirty? No, to us, the trusting British public, that'll be £2.50 or thereabouts. Can you think of a product with a higher mark-up than a greeting card? An acquaintance told me that cartoonists are paid a pittance for card designs, as little as £50 a time. So, I imagine that the humongous profits are being trousered by the manufacturers and retailers. No surprise there! 5. Travel insurance If you're jetting off on a winter break or ski trip, don't be duped into buying travel insurance from your travel agent or tour operator. If you fail to shop around, then you could pay a premium ten times higher than a Best Buy provider would charge. For the low-down on this £700 million-a-year scam, read Great News For British Holidaymakers. 6. Tree-lights cover In the 17 November edition of the Guardian Money section, Sean Coughlan warns consumers to avoid needless insurance cover for Christmas tree lights. If you buy a set of fairy lights from Homebase this Xmas, then expect to be offered steeply priced `replacement cover' at the till. This lasts three years, but doesn't cover damage caused by faulty lights, and only provides a voucher refund if lights fail or suffer accidental damage (the first of which is covered by your rights under the Sale of Goods Act). Here's how much this spurious protection adds to the cost of tree lights: Lights cost (£)Cover cost (£)Extra cost (%) 9.99 2.99 30 17.99 3.99 22 22.99 5.99 26 In short, this is a breathtakingly cynical rip-off which can be rejected out of hand with no further explanation. Shame on you, Homebase and your insurance underwriter, Allianz Cornhill! 7. Using credit cards overseas If you are jetting off over Noël, then be careful which plastic cards you take abroad with you. Almost all credit cards charge a fee when you pay for goods in currencies other than sterling. Usually, this `currency conversion fee' adds 2.75% to 3% to the purchase price. So, take the wrong card overseas and £2,000 of spending could cost you an extra £60. However, as I revealed in Keep These Credit Cards At Home, credit cards from Nationwide Building Society and the Post Office don't levy this additional charge. Finally, if you'd like to warn other readers of Christmas cons, festive fiddles and seasonal swindles, then please post a message on our feedback board. Thanks for your help! More: Find great-value credit cards and travel insurance via the Fool | The Nicest Christmas (Credit) Cards