The eight biggest Christmas cons

As Xmas approaches and consumer spending becomes a whirlwind, we reveal the eight biggest ways to get taken for a ride -- but not in Santa's sleigh...

Christmas tills are ringing...

At this time of the year, retail spending goes through the roof as the present-purchasing season gets underway once more.

Here at lovemoney.com, we’ve been trying to help you keep the worst of it at bay. We’ve been banging on about How to make money from your Christmas shopping and rounding up the best online bargains on our blog Frugal Friday and showing you how to make Five fantastic gifts for under £5.

But there’s more you need to know. If you are going to rush off to the shops to grab some gifts, it’s vital you have your wits about you. Otherwise, you could be a victim of these six Christmas cons (in A-Z order)!

1. Charity Christmas cards

Many of us buy charity Xmas cards believing that we're generously given to good causes. Alas, charitable contributions from the sale of Xmas cards can be tiny. In fact, as we revealed in The worst charity Christmas cards, the donation can be as little as a few pence per pack of cards.

If you want to buy charity cards this Xmas, then check how much they cost per card and how much of the purchase price goes to the good cause. In many cases, retailers pass on, say, 10% or less of the retail price to charity, while keeping the lion's share of the profits. Indeed, a 'charity card' can donate as little as 2p in the pound (2%) to a good cause and still qualify.

My advice for caring consumers is to buy high-quality cards via the Card Aid website run by the Charities Advisory Trust. Alternatively, buy cheap Xmas cards from a supermarket and then donate the difference (plus extra tax relief via Gift Aid) to your favourite good cause.

2. Charity credit cards

Now we switch from paper to plastic cards. Millions of Brits do their spending using donation credit cards. After opening one of these charitable accounts and using your card, a good cause gets an upfront donation of between £5 and £25, plus 0.25% of your yearly spending. In other words, if you spend £1,000 a year, then the ongoing donation will be just £2.50 a year.

I've never been a fan of charity credit cards, as you can be up to eight times as generous. Instead of spending on a charity card, spend on a cashback credit card. Each year, donate your cashback reward (via Gift Aid) to your chosen charity. This can boost your return to almost £20 per £1,000 spent (2%), instead of a mere £2.50.

3. Extended warranties

If you're buying an electrical item as a present this Christmas, odds are you'll be asked at the till whether you'd like to buy an extended warranty.

These are rarely worth the money. You have a manufacturer's warranty for the first year and may be covered after that by your home insurance policy for accidental damage to items in the home.

If you do want to get an extended warranty, don't buy it from the retailer or the manufacturer. Instead, shop around online. For example, a specialist warranty provider such as Warranty Direct can cover three items for £10 a month. It also offers various packages for kitchen appliances, home entertainment or for every electrical item in your house. How much this costs depends on the items you want to insure, how old they are and how much they cost. You can get a quote at warrantydirect.co.uk and using promotional codeRAOX108 will get you a 10% discount.

4. High street shopping

Last week, we revealed that there are certain Christmas gifts you should never buy on the high street.

In some cases, retailers charge as much as a third more for the same item if you buy it in the shops. Here’s how the savings broke down:

Use a shopbot to ensure you’re getting the cheapest price online or an iPhone app like Red Laser to make sure you’re getting a decent price in the shops.

5. Set Christmas menus

You know the drill. You turn up to the restaurant and instead of its normal two- or three-course option for £10 or £15, the cost has jumped to £19.95 or even more. For what? Often the options are broadly the same, with a turkey and Christmas pudding thrown in for good measure.

Bah humbug, I say!

6. Christmas trees

Every year, you buy one. And every year, just a few weeks later, you throw it away.

OK, so Christmas wouldn't be Christmas without it - or would it? Do you really need fork out on a Christmas tree to be able to spend quality time with your family, or to celebrate Christmas as a religious holiday?

Maybe it's all just a con dreamt up by the Norwegians to ship their firs around the world. In collusion with B&Q and garden centres everywhere, of course.

Either way, if you're going to shell out for one, at least remember to follow the lovemoney.com mantra: shop around, shop around, shop around! And if you can, recycle it afterwards. Many local councils now offer this service - have a look on recyclenow.com for details of the recycling services on offer in your postcode after Christmas.

7. Pre-sale prices

You buy it before Christmas, when it costs £80. By Boxing Day, it costs £40. By mid-January, it's £20. It's like the shops know we need to buy gifts by Christmas Day, or something.

The only way to avoid this rip-off is to keep receipts for everything you buy, and double-check all the prices when the sales start. As long as the items are in good condition and you've kept the original packaging, you can probably get away with returning anything that's dropped in price, and then simply buying it again at the sale price.

Just make sure you check the returns policy of the shop, as it's up to the shop to decide how much to refund you. However, if you bought the goods over the internet, you have the legal right to return the goods and get a full refund within seven days of receiving the goods.

Winner!

8. Travel insurance

My final seasonal rip-off is travel insurance. If you're planning to go away over Christmas, or hit the ski slopes in the New Year, then be sure to find the right policy to protect you while you're away.

Your goal is to find the right level of protection at a value-for-money price. Never be tempted by convenience into buying your insurance from a travel agent or tour operator, as these policies can cost up to ten times as much as a Best Buy!

Tell us what you think

What are the worst Christmas rip-offs, in your opinion? Please share your thoughts with other lovemoney.com readers using the comments box below.

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