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Value of Returns

So I’ve got a friend, who will remain anonymous, that kept mentioning how many things she had in her closest that still had tags on them. After much urging on my part, she finally decided to confront the issue.

She summoned all of the clothes with tags to come out of the corners of her closet and headed down to Nordstrom.

She sucked up the pain and embarrassment of returns and walked out of there with a whopping $1,600 back on credit card!

Yep, that’s right! $1,600 worth of clothes with their tags remaining. That is just from Nordstrom! She still has to deal with the rest.

Now people have mixed feelings when it comes to returns. The way I see it, most people fall into two camps:

a) those who believe in them and are good at taking care of them, or
b) those who dread them and are don’t want to deal

While I can sympathize with those who don’t want to deal, it comes at a hefty price. Both in the value of the potential returns for those things that just don’t work out as well as expected, and in the added regrets in your life. Think of the money you could be investing, and the wealth you could be building for your retirement if you just make returns instead of leaving them stored away in your closet!

Thus, as you can tell, I fall into the A group. I buy all my shoes at Nordstrom because I don’t buy them often, but when I do I want quality and want to make sure that they can be returned if they don’t work.

If you are in group b and would like to move to group a, there is still hope! Here are a few tips to easier returns:

  1. Avoid buying things that you don’t need or think might not meet your expectations.
  2. Keep receipts for anything durable.
  3. Deal with returns promptly.
  4. Don’t be shy! You are a good customer and you will likely shop there more knowing that they respect returns.

Readers: If you have return stories we’d love to hear them!

Many happy returns!

Miel

The Amazing Decling I Bond Interest Rate

Hi All,

This morning I popped over to treasurydirect.gov to check the rate on savings bonds. The treasury has cut the rate on inflation (I bonds) savings bonds to 0%. Thats right, zero, zilch, nada. If you loan your money to the government for this product, you get nothing.

This comes on the heels of a number of other actions by the federal government to reduce bonds sales, including cutting the savings bond marketing budget, lowering the minimum amounts for Treasury Bills, eliminating on-line credit card purchases of savings bonds, etc, etc. (1).

Frankly, this is a sharp stick in the eye for small investors and savers. The minimum on I bonds is 50 dollars, which is affordable even for the working poor. Also the previous rate was 5.46, not great but better than most comparable products.

Part of the reason for the decline is that the central bank is concerned more about deflation that inflation. The I bond has two rates, an inflation component and a fixed rate. The inflation component is at -2.78 which makes sense since inflation is low, but the fixed rate is .10. One would have assumed that they would have at least kept a marginal small positive rate, given that so many individuals in the US are active buyers of I bonds. Instead, they are not where you want to put your wealth right now.

Best,

James

Bank Failure Friday

And another bank has failed. This time its Eastern Florida Financial Credit Union.

Click here for the announcement.

Here is some CNN coverage on last weeks failures (CNN).

Whats sad is that its not even big news these days.

Update: here is another one – North Jersey Community Bank (MarketWatch). Dang.

Update2: Geeze. Yet another bank has bit the dust. This time its Utah Based America West Bank (MarketWatch). I think this makes 33 so far this year.

Best,

James

Victorville Homes Demolished

Hi All,

This came across my radar screen this morning. As a sign of the times, one California bank is having to demolish its real estate developments. Evidently what happened was the bank funded a housing project in Victorville that couldn’t finish before the boom ended. They got left holding the bag, had to pay a number of fines to the city and took a $592,000 quarterly loss (1).

One just hopes this isn’t a trend.

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