How to profit from someone else's financial mistake

FILE - This April 2017 file photo provided by NerdWallet shows Liz Weston, a columnist for personal finance website (NerdWallet via AP, File)

If you don't mind cosmetic flaws or lightly used items, you can save when users return or upgrade

Most of us have wasted money on ill-considered purchases or stuff we really couldn't afford. As we get more financially savvy, that happens less often. But we can still profit from other people's bad choices.

People who prize the latest and greatest, for example, quickly need to upgrade to the next shiny thing. That leaves plenty of lightly used cars and electronics for sale at a discount.

People who can't look beyond cosmetic damage also provide buying opportunities for those who can, since surface flaws can ding price without hurting functionality. Then there are the "d'oh" mistakes: the stuff that didn't fit or turned out to be the wrong shade of robin's egg blue. That stuff gets returned so it can be discounted and snapped up by frugal buyers.

Here are three ways to profit from others' mistakes:


Low payments can fool people into thinking that leasing is an economical way to afford cars. In reality, leases ensure you're paying for a vehicle's most expensive period — the first two or three years, when its value drops like a rock. Vehicles typically lose about 30 percent of their value the first year, and a total of 40 percent by the third year, says Ivan Drury, senior manager of industry analysis for car comparison site

The good news for bargain hunters: A whole lot of people have made that pricey choice in recent years, leading to a record 4 million vehicles coming off their leases this year. In addition to discounts of 30 percent or more compared to a new car, buyers will have plenty of options.

Leasing was once mostly limited to luxury cars, but it's grown so popular that buyers have plenty of used makes and models to choose from. That includes the "it" vehicle of the moment: compact SUVs, Drury says.

These freshly off-lease vehicles tend to have mid-range trim packages, which means they're not bare bones but they're also not overloaded with features you might not want to pay extra to have, Drury says. They will have the kinds of safety features and technology that a few years ago were only available in luxury cars.

"They have backup cameras, Bluetooth, blind-spot detectors," Drury says. "You can get a lot, at greatly reduced prices."


Thrifty shoppers tend to stay a generation or two behind on electronics, knowing that early adopters pay a hefty premium. But within a few weeks of virtually any gadget's debut, there will be buyers regretting their purchases and companies refurbishing those returns for resale.

Depending on the seller, though, "refurbished" can mean "like new," with fresh batteries, new cases, and one-year warranties — or not.

"Some just say 'refurbished' because they wiped it down with a rag," says Tercius Bufete, associate editor for Consumer Reports. The electronic item may come with third-party accessories, such as charging cords, or none at all.

The only way to know is to "read the assurances," Bufete says. That's the fine print that spells out what's been done to the item, the warranty (if any) and the length of the return period (if any).

Just in case, consider using a credit card that offers "return protection" or "guaranteed returns." This benefit offers you money back, up to certain limits, if a merchant refuses to accept a return.


The phrases "open box" and "scratch and dent" are music to the bargain hunter's ears. They signify new or nearly new items at a discount — sometimes a steep one.

Bargain shoppers at Ikea, for example, know to cruise the store's "as is" section for deals on already-assembled furniture and other items returned by customers who changed their minds. Likewise, big-box home improvement stores usually have an "open box" area for returns and floor models.

"Scratch and dent" stores are another option for picking up someone else's oopsie, whether it's a homeowner who forgot to measure an appliance or a piece of furniture that got dropped during delivery. It's important to check warranties and return policies. Sears Outlet, for example, has a 30-day return policy for most purchases, but not floor models. Other stores make all their scratch-and-dent sales final.

This column was provided to The Associated Press by the personal finance website NerdWallet. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of "Your Credit Score." Email: Twitter: @lizweston.


NerdWallet: How to lease a car

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