Holiday Shopping Tips from an Expert

These strategies will help you get the lowest price, best gifts, and avoid debt.

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Kit Yarrow, consumer psychology professor at Golden Gate University in San Francisco and coauthor of Gen BuY: How Tweens, Teens, and Twenty-Somethings Are Revolutionizing Retail, knows how to shop. After all, she’s a professional: Her job involves studying how other people make their purchasing decisions. So I asked her for some tips that can help us survive this frenzied time of year.

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What is it about the holidays that seems to inspire people to spend more money?

It's not just gift-buying. People feel celebratory this time of year. They go out more, have more dinner parties, and want to buy outfits to wear to social events. There's also a primal instinct to light up the darkest months of the year, which adds to our desire to decorate our homes.

What's different about this year?

This year really is completely different. Shoppers have changed. They’re more resourceful and determined, less impulsive, and they use technology more confidently than ever before.

Also, because they’ve been practicing bargain-hunting skills for a couple of years now, shoppers feel more in control and are therefore allowing themselves to consider products they’d slammed the lid on the past two holiday seasons. Things like jewelry and luxury leather goods. It’s also starting to become more about the deal than just a discount. By that I mean that an element of what I call competitive sport shopping is starting to return. It’s not just about the price but also about the thrill of the hunt or the exclusivity of the product or promotion.

Probably the most important shift though is how masterful shoppers have becoming at using technology to help them shop. From checking prices on their phones in the mall to ordering personalized candy online, this is the first year technology assisted shopping has become mainstream. Surprisingly, online buying is a tiny fraction of the retail business, only about 10 percent. But it’s growing in leaps and bounds and I’m expecting a huge jump this year, especially with all the free shipping options.

[For more money-saving tips, visit the U.S. News Alpha Consumer blog.]

What about retailers, what are they doing differently this year?

Retailers have also changed. They’re no longer in a reactive, defensive position. The weakest retailers have folded. The strongest and most resourceful remain and they have a whole new bag of tricks that are highly psychological.

Most notable is the short-term sale. It’s not about progressive discounting anymore, these sales are designed to inspire a sense of urgency and the fear of missing out. The in-store versions also capitalize on a herd mentality. Also, what many shoppers don’t know is that lower quality products are often brought in for these sales and some of the best products are excluded.

A second powerful new trick is the use of social media and email marketing. These communication vehicles feel personal and often lead to a sense of intimacy with the retailer. The result? Consumers are more willing to consider that retailer’s products and special offers and are more willing to make prices concessions. It’s the 2010 version of a private shopping party.

One more example: gifts with purchase. I’m always a little stunned by how much money people are willing to pay to get something for free. Notice that in most cases you have to reach a spending level to get the gift card or the free sample packet. This isn’t a new technique but it’s super prevalent this year.

Can you share some of your own holiday shopping tips and secrets?

Don't go into debt to purchase holiday gifts. Ultimately, your loved ones would rather have a "happy you" than a new toy.

Order gifts for out-of-towners online to save postage costs. Nearly every online retailer has free shipping promotions.

Ask for gift receipts for all of your gift purchases, and tape them to the product or package right away. Keep your own receipts too—if something that you've purchased goes on sale, you can generally get a price adjustment up to two weeks after you bought it.

Go easy on trinkets. That goes for special do-dahs for wrapping too.

Develop relationships with salespeople in stores. You can ask them to ring up what you want on a day it will go on sale. This probably wouldn't work at Wal-Mart, but it does at department stores. Retailers want those relationships as well. They want consumers to feel connected with them.

What about timing? Is it better to buy early or late?

It depends on the exclusivity of the gift. If there's something that's special or particular that you want somebody to have, don’t wait too long. Retailers have mastered inventory management and there won’t be much surplus this year. Generally speaking clothes go on sale early and styles and sizes will disappear by Christmas, electronics are best to buy during a promotion, toys generally don’t go on sale until right before Christmas but this year you’ll also find some strong mini-promotions throughout December.

Any last advice?

Make a list. It sounds so Santa Claus-ish, but organization reduces stress and keeps you on budget. The malls are incredibly fantastic, magical places if you're not stressed out. It's beautiful, it's convivial, it's fun. If consumers feel like they have shopping under control, then they’re freed up to enjoy being part of the community.

Kimberly Palmer is the author of the new book Generation Earn: The Young Professional’s Guide to Spending, Investing, and Giving Back.