Understanding Freebies

By Jeffrey Strain

Date: 03/15/2005 Topics: Budget and Finance | Cleaning > Advice

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It seems that everyone is after "freebies" these days to save a little money. While this may appear to be a good way to save, understanding why freebies are offered and the different types of freebies that are available is essential to make sure you aren't spending more that you thought. "Spending more than I thought? It's a freebie, how can I be spending money?" you may be asking yourself. That's what this article is going to show you so you can determine if that freebie is truly free.

Take the example of 0% financing that is widely being promoted for new vehicle sales. While it seems that this is a good deal on the face of it, people fail to realize that the 0% financing isn't really "free." According to Power Information Network, during a five month period, the average buyer who financed with a 0% loan paid over $1,800 more for a Ford Explorer than those who paid in cash or used another type of loan. The 0% "free" interest loan isn't so free when viewed from this perspective.

Most people assume that a freebie means that you can get the item for no cost. It makes logical sense, but in reality it isn't quite that easy. First and foremost, it is important to realize that "Free" is a relative term. Companies give away freebies not out of the kindness of their heart, but to drive traffic to their site or store, to build good customer relations, to attempt to get you to purchase other products at a future date or any number of similar reasons. It is always important to remember that there is an alternative motive behind the freebie being given away.

That being said, it doesn't mean that all freebies are a worthless waste of time. Freebies can be an excellent way to save money, but you need to understand the different types of freebies that are out there and then make sure that the freebie is not costing you money in hidden ways. Here are some of the typical types of freebies offered and what to look out for:

Free Sample: This is when a product is given away (usually in a smaller "trial" size, but full size samples can also be found from time to time) with the intention of letting you try it to see if you like it. The manufacturer is willing to give away a sample of the product in hopes that when you try it, you will like it enough to begin using it or switch to their product from a competitor you were previously using. These rarely carry hidden costs and probably are the image most people have when mentioning the word "freebie."

Free With Purchase: This is where you receive something at no extra cost as an add on when you purchase a certain product. While these can be good deals if you were planning to buy or need the main product being sold, you need to be careful not to purchase something you don't really need just because it comes with something free attached.

Free After Rebate: With this method, you pay for the product up front and then send in some type of proof of purchase (usually a bar code accompanied by the receipt) to get a rebate on the money you paid. While these look great while purchasing the product, it's important to read the fine print and terms before proceeding to purchase. Chances are there will be some restrictions which may make getting the rebate difficult. You want to take the time to know that you will qualify for the rebate and can receive it with relatively little work before you buy. If you don't, you may find that the freebie is not so free after all.

Free Trial: This freebie gives you a product or service at no cost for a certain period of time. Two classic examples are one month free memberships or three free issues of a magazine. As with a free sample, the companies hope that once you begin using their product or service, you will continue to do so.

The point to be careful about in regards to these free offers is that you are usually required to cancel the membership or subscription once the free trial period is over. If you don't, then you will automatically begin being billed for the product or service. It is easy to forget these dates and your free trial can become quite expensive if you don't religiously keep track of the dates.

Free Reward: This is where you receive something for free after doing something or completing a task. A classic example is receiving something after filling out a survey or applying for a credit card. The issues to take into consideration and weigh are whether the time spent doing the activity is worth the reward or, in case of filling out an application, will completing the activity cost you in some other way down the road.

Free Shipping: This has become the mantra to selling on the Internet. You buy the product and receive free shipping. The problem here is that we all know that the shipping has to be paid for somewhere, so you can make an educated guess that the shipping fee is being passed onto you in some other form. Classic examples of these are "processing fees" or "handling fees" which are added to the cost of the product. Even when these don't appear outright, you can be sure that the free shipping has been factored into the cost of the product.

As you can see from the above information, free can actually end up costing you in hidden ways if you are not careful. In the end, taking the time to understand all the information and terms associated with the free offer is essential to make sure that the free offer doesn't end up costing you more than if you had never pursued it in the first place.

About The Author:
Copyright (c) Jeffrey Strain. He is owner of http://www.charityclickdonation.com - a website where you can make donations to your favorite causes with a click of your mouse and no money out of your pocket.

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