Today's tip is to use a featured called "price protection" whenever possible, which lets you protect yourself from price drops. In plain terms: If you buy something and the price goes down, the company will refund you the difference.
Price protection is something you hardly ever hear about, but it tends to be applicable to very expensive purchases...meaning you can save a lot. Here's how it works: When you make a purchase, occasionally the price will drop shortly thereafter. (For example, on flights, or if you bought the original iPhone and the new 3G iPhone came out a few days later.)
The trick is, many times you can often get refunded the difference. If you imagine a flight dropping $200 (which is very possible), or a new computer dropping $100, that can add up quickly. Let's take a look at some examples.
Purchases on your credit card
Your credit card will often offer price protection guarantees(more about unusual credit cards rewards).
And my own credit card, the Citi Premier Pass Elite, offers this:
Retail Purchase Protection2
Most items purchased with your card are eligible for protection against accidental damage or theft for up to 90 days from the date of purchase.
Price Protection
If you buy something with your Citi card and then see it advertised in print for less within 60 days, you will receive a refund for the difference up to $250 (excludes Internet purchases and certain items).
Since I am a huge nerd and make virtually 99% of my purchases online, I haven't used the price protection offer yet. But one day, I have a bright dream that I will purchase something offline and avail myself of the generosity of the corporate automatons at Citibank.
Price protection for travel
Orbitz has an automatic price guarantee that most people don't know about. You don't even have to do anything -- they'll just mail you a check if the price drops. (However, I book a lot of flights and I've never gotten a check...so can anyone verify this?)
A new travel site on the block is Yapta, which also monitors flights and will refund you the difference in a price drop.
As a sidenote, my favorite travel sites are Mobissimo and Kayak, which give me awesome travel deals.
I don't really like that ad showing up right above this line but I'm too lazy to crop the photo.
Price protection for general retail purchases
Whenever you make major purchases (say, over $200), you should have a checklist of things to do. Check for discounts, add it to your auto-monitoring for price protection, etc. I'll talk more about this in another post.
But for now, check out PriceProtectr, which lets you enter your purchases from 150 stores (Costco, Apple, BestBuy...) and automatically monitors the prices to see if you're eligible for price-protection refunds. Check carefully, though: They still list Amazon as one of the stores they monitor, but Amazon doesn't do price protection anymore.
Note: Don't do this for $20 purchases. Don't waste your time. Just focus on the big 5-10 purchases you make per year and optimize those.
Total savings: $10 to $30 per month
Last thing to do
1. See other tips in the Save $1,000 in 30 Days Challenge
2. Leave a comment on this post describing how much you're saving with this tip and any unusual techniques you use to make this tip work.
If you liked this tip, check out my Premium tips -- one long, tactical tip per week. Save money or get a 100% refund.
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