Pros and cons of EOFY sales
You only have a few days left to take advantage of end of financial year sales. But are they really worth it?
End of financial year (EOFY) sales, held every June, have become a significant event in the retail calendar, attracting customers with the promise of substantial discounts and special offers.
While these sales present many advantages for both businesses and shoppers – including, in some cases, tax benefits* – they also come with certain drawbacks.
Here are some of the pros and cons for you to weigh up before you hit the EOFY sales.
Significant discounts and savings. The obvious attraction of EOFY sales is the substantial discounts offered on a wide range of products, from electronics and appliances to fashion and furniture. It’s an opportunity to save money on big-ticket items and everyday necessities.
Stock clearance for businesses: For retailers, EOFY sales are an effective way to clear out old inventory and make room for new stock. This is particularly important for businesses that need to manage their financial accounts and stock levels before the new financial year begins.
Tax benefits*: EOFY sales coincide with the tax season, providing consumers with the chance to purchase items that can be claimed as tax deductions. This is especially beneficial for small business owners and professionals who need to invest in equipment or office supplies.
Boost in sales and revenue: Retailers benefit from a surge in sales during EOFY sales. The increased foot traffic and online shopping activity can lead to higher revenues, helping businesses close their financial year on a strong note.
Increased consumer spending: The anticipation and excitement surrounding EOFY sales can stimulate consumer spending, which in turn boosts the economy. Shoppers are more likely to make purchases they might have otherwise postponed, leading to a temporary spike in retail activity.
Consumer overspending: The allure of significant discounts can lead consumers to overspend or purchase items they do not need. This impulse buying can result in financial strain, particularly for those who do not budget carefully.
Stock shortages and limited availability: High demand during EOFY sales can lead to stock shortages and limited availability of popular items. Consumers may experience frustration if they are unable to purchase desired products at the advertised discounts.
Potential for lower quality service: With the surge in customers and transactions, there is a risk that the quality of customer service may decline. Retailers might struggle to maintain their usual standards, leading to longer wait times and a less personal shopping experience.
Market saturation: The prevalence of EOFY sales across numerous retailers can lead to market saturation, where the sheer volume of sales events diminishes the perceived value of discounts. Consumers might become desensitised to sales, reducing their effectiveness over time.
EOFY sales offer a mix of benefits and challenges for both consumers and businesses.
While the potential for significant savings, tax benefits, and increased revenue is appealing, it is important for customers to navigate the sales with caution.
*Contact a qualified professional for financial and taxation advice applicable to your individual situation.
