What are the festive flops and the cracker deals when it comes to Christmas savings schemes?
The weekend before Christmas, Kiwi shoppers spent $429 million in New Zealand stores. This type of last-minute spending can put a big dent in your bank balance, but you can enjoy a debt-free festive season if you start saving now.
I’m a self-confessed Christmas nerd. For the past couple of years, I’ve been putting money into a bank account every payday and sporadically buying supermarket Christmas vouchers. This definitely takes the pocket pain out of holiday season spending (and prevents the heart attack over the credit card bill). But, is this the best strategy or could I make my money go further? Time to find out.
There are various Christmas savings schemes on offer – supermarket and other company Christmas clubs, hampers and savings accounts. We found big differences between the cracker deals and festive flops.
Chrisco is the big player in the Christmas hamper world. You select a hamper from the company’s catalogue or website and fork out payments until you cover the cost. The earlier you sign up, the cheaper the weekly hit. You’ll get your goodies delivered in November or December.
There are several hampers to choose from – from butcher hampers for the BBQ junkie to keeping the kids happy with a stash of treats. There’s also a selection of festive hampers including the Mega Christmas, which sets you back just over $900 ($26.54 for 34 weeks) and Kiwi Favourites The Lot ($19.58 for 34 weeks – $665.60 in total).
But you can’t choose what’s in your hamper and might not want all the items – the instant noodles and Marmite in the Mega Christmas hamper may not bring joy to your world. Plus, all the items turn up at once so you have to find room to store everything, including the meat and 11 packets of frozen vegetables and fries in the Mega Christmas hamper.
You’ll also pay a lot more for the groceries than if you’d bought them at the supermarket. The Mega Christmas costs $902.20, but a similar basket of goods at the supermarket only cost $580. Chrisco stings you $665.60 for the Kiwi Favourites The Lot, but we found the items for about $430.
If you tend to blow your budget on alcohol, Chrisco isn’t a jolly option. Its Premium Beers hamper costs $153.40 for four dozen. We could buy the same beers for $89 at Pak‘nSave, $105 at Countdown, and $115 at Liquorland.
Our verdict: For groceries and booze, Chrisco is an expensive option. Although the company packs and delivers the goods, you’re better off doing the work yourself and getting the items you want. Even if you forked out to get your products delivered – it’d still be much cheaper.
At Countdown you buy Christmas club vouchers throughout the year. You can use them anytime, but between 1 December and 31 January you’ll get a 5% bonus (as long as you bought the voucher before 1 December). You’ll need to keep your vouchers in a safe place as they aren’t registered to you or your Onecard, and they can’t be used online.
FreshChoice supermarket has a Christmas Saver Plan where you set up a direct debit or automatic payment. You choose how much you put in but you must make an automatic payment every Thursday. You can use this saved amount from 1 December to 31 March and get a 5% discount on the costs of your saving plan – for every 95¢ spent you receive $1. However, you can only spend it at the supermarket where your plan is registered. This makes it less flexible than other supermarket plans, which you can use at stores nationwide.
New World and Pak‘nSave, and Four Square’s South Island stores, issue Christmas club cards. You top them up at the checkout, or you can set up regular bank payments. You earn bonuses on the saved amount and the earlier you start saving, the greater your bonus. Every $5 saved before 29 February gives you $5.32, down to $5.17 between 1 September and 30 November. You can register your card, which means you can deactivate it if you lose it. You can use your card anytime, but the bonuses aren’t credited to your account until December.
Our verdict: Supermarket Christmas clubs are much better value than Chrisco hampers. If you put away $15 a week for 34 weeks you’ll have $510 plus bonuses. You can choose the goods you want (although some clubs exclude items such as tobacco and gift cards from the bonuses) and if you don’t use all the balance you can use it the following year. Cards have an advantage over vouchers – you can register them, and disable them if they’re lost or stolen.
There are two main providers: Hampsta and The Warehouse.
With both, you make payments throughout the year by direct debit or automatic payments. At The Warehouse you can also top-up in-store. Hampsta lets you make payments at some of its retailers (Mad Butcher, Noel Leeming or Super Liquor).
The Warehouse gives you a 5% discount, even on sale items. It also has a $500 prize draw every month for club members who top up that month. The Warehouse card has no fees, but Hampsta stings you a $39 annual fee and $40 if you want to cancel.
Access to your savings is limited to a “redemption” period – The Warehouse is from 1 December to 6 February, Hampsta from 1 December to 10 January. After this, your savings are locked away for another year.
The Warehouse card can only be used in-store (not online). Hampsta has 15 retailers, including Toyworld, Rebel Sport, Super Liquor and Unichem. But there’s no guarantee the retailers will stay the same throughout the year.
Our verdict: The Warehouse card is better value than Hampsta – it has no fees and a discount, but you can only use it at one store. The Hampsta card eats away at your contributions with its annual fee and doesn’t have bonuses – but it offers more variety than The Warehouse card.
Another option is a savings account that rewards you for adding to your balance and not making any withdrawals.
Most banks offer a bonus saver account, with no monthly fees so any interest you earn won’t get nibbled at. The accounts offer a low base interest rate (0.05% to 0.15%) but gives you a bonus rate (about 2%) if you don’t take any money out and make a regular deposit. Each bank has different terms and conditions, and you may have to meet other criteria, such as having a transaction account with the bank, to be eligible.
Bank accounts are flexible – you can decide what you spend your money on and the cash is there in case of an emergency.
Some credit unions have Christmas accounts where you earn interest, but you’ll usually have a limited time to access your funds. First Credit Union Christmas Club gives 2.5% interest on your savings and New Zealand Credit Union South offers 1.6% . You set up regular payments or contribute when you have spare cash, but you can only get your hands on the money in November.
Our verdict: Bank accounts are flexible – you can decide what you spend your money on and the cash is there in case of an emergency. However, if you’re just wanting to save for groceries, a supermarket club gives better returns.
What happens if you change your mind or want a refund on what you’ve already paid?
Chrisco gives you a fee-free 21-day cooling-off period. After that, you may forfeit 20% of what you’ve paid (up to a maximum of $250). If you can’t keep up the payments, the order (in products or vouchers) will be reduced to the amount you’ve paid.
Countdown, New World, Pak‘nSave and Four Square let you use your vouchers or balance early, but you won’t be eligible for any bonuses.
FreshChoice lets customers end payments at any stage, but they won’t be able to get their contributions until the end of November. Amounts aren’t refundable in cash, except in exceptional circumstances.
The Warehouse gives you a seven-day cooling-off period and you’ll be refunded any money you’ve paid during that period. After that, you’ll need to wait until December. The Warehouse considers cancellations and refunds on a case-by-case basis.
Hampsta has no cooling-off period and you can’t cancel your membership in your first year before 1 December. After you cancel you’ll get what’s remaining once the $40 cancellation and $39 maintenance fees have been deducted. In the case of financial hardship Hampsta may refund your money, but will still take the account closure fee.
Chrisco is a form of lay-by, so if it goes into receivership you’ll be a creditor with priority over unsecured creditors. However, when a company goes bust, there’s often no money left to pay out.
Hampsta has the funds held separately with The New Zealand Guardian Trust and retailers are reimbursed directly from the account.
The supermarket clubs and The Warehouse club have the funds held by their parent company in a separate bank account or under a separate company.