In good news for retailers and bad news for consumers, online retail is set to grow in Australia as more consumers embrace eCommerce. The bad news: research from Couriers Please has revealed Aussie credit cardholders are accumulating more debt as they race to buy online.
Couriers Please survey of over 1000 Australians found three in ten believe that online shopping has created more credit card debt for them. 42 per cent of shoppers say they use their credit card online compared with 35 per cent in-store. While the rise of buy now pay later options such as Zip Pay and Afterpay is seeing 18 per cent of shoppers also accumulating debt.
Significantly, close to half (42 per cent) of consumers will use a debit card when shopping instore, while 16 per cent use cash.
CP spokesperson, Jessica Ip, says: “Our research indicates that online shopping transactions in Australia are more likely to have a more positive growth rate than with in-store purchase levels, with more people relying on credit and buy-now-pay-later services – essentially with money they don’t have – when making online purchases.
“With the online market attracting a growing level of transactions, retailers are now looking to help eliminate consumer disadvantages that are unique to that market: deliveries and returns. Free and fast shipping will help promote repurchasing and increase customer loyalty.”
Jessica’s 5 tips to help minimise debt from online shopping:
Avoid paying full price
Most retailers have regular sale or promotional periods that are cyclical and predictable. Where possible, wait until these discount periods to avoid paying full price. Alternatively, take advantage of promotional codes or coupons offered on websites and apps such as ozbargain and Honey which can be applied at checkout to make your purchases cheaper.
Consider shopping from online retailers that offer free shipping and returns
Many retailers now offer free shipping, particularly when a certain transaction level is reached. Shopping from online stores that offer free or discounted returns ensures you aren’t being penalised for your change of mind – and it can be a small step to not incurring further debt.
Check the refund or exchange policy of the retailer
Don’t assume that all retailers will offer a full refund, as some will only provide a store credit instead. Before making a large online purchase, familiarise yourself with the retailer’s return policies to see if you will get a full refund for change of mind purchases. If it turns out that you are unlikely to shop from this store again, a credit voucher may offer little value.
If you can pay it in full, do it
While the likes of Afterpay and Zip Pay offer interest-free instalments for your purchases, it’s often better to pay it in full to avoid carrying the debt. If you do use these payment services, ensure you understand the terms and conditions to avoid incurring any extra fees. For instance, Afterpay charges late fees for missed payments, so it’s best to set yourself a reminder to pay your instalments on time.
Use ad-blocker to avoid seeing personalised ad targeting
How many times have you seen an ad appear on your browser featuring a pair of shoes you had your eye on? By using an ad-block extension on your browser, you are less likely to see ads that could tempt you to click and shop.