Real $$$ with Discounts !

Image via WikipediaMeet your new best friend - Discounts!

Now, I have a confession to make here - until my experiments started, I never asked for discounts. At minimum, Discounts are supposed to reduce the cost of your consumption. However, they do more than that. By reducing the cost of consumption, they leave more money that can earn interest. Also, dollar for dollar, every time you forgo a discount you could have used in 5 minutes, you have depleted more than one whole YEAR's accumulated after-tax interest.

If you are a skeptic - like I was - let me tell you how I was convinced.

First, I realized that in a 5 minute transaction, if I get a discount on $1 of say 10% (the usual discount amount), I would have saved 10 cents. Not worth the effort, right? No, actually.

For one, it's very straightforward to get a discount, so it's not really a bother.

For two, and this was the clincher for me, I thought to myself, well, how long does it take me to get 10 cents worth of interest on $1? Well, as it turns out, its much longer than 5 minutes. It can even be longer than a year. That's right ONE WHOLE YEAR. That's because the majority of after tax interest rates of saving are less than 10%. So, here came my "aha moment" when I realized that by not asking for a discount, I was negating all the interest I was earning. No, that would not do.

For three, the more money that stays in my saving account that is not spent earns interest so why not reduce the cost of consumption if I can.

Let me tell you about my discount experiment:

Because I have car insurance with NEM (in Jamaica), I am provided with a JAA card.
Full Disclosure: I work with JNBS, the parent of NEM and JAA.

Now, JAA stands for the Jamaica Automobile Association (it is affiliated with the International Automobile Associations ). JAA has discount partners with more than two hundred (yes, 200) merchants with discounts ranging from 5%-55%! See list here.

I wanted to see how the discount program worked so one Saturday afternoon a few weeks ago, I went to my regular pharmacy for an item. They had it and the cost was J$500. However, my regular pharmacy was not listed as a JAA Discount Partner - that means I could not use my JAA card. So, I went to the next nearest pharmacy listed as a JAA Discount Partner. They had the item and it was the same price as my regular pharmacy.

Great, I thought! 10% off means I save J$50. In 5 minutes, I would have saved myself what it takes more than one whole year to earn in after-tax interest on savings on a J$500 deposit. AND, if I save J$50, I can continue to earn interest on the J$50. Now, I was really excited.

But alas, there was a hitch. I asked a store employee if I could use the JAA card for my discount and was told no. I said "But, there's a sign on the door". There was. But maybe she didn't remember or was new. So, luckily I had carried my list from the JAA (a multiple page document outlining all the discount partners and the amount of the discount) and showed her that the pharmacy was listed. She was most gracious and agreed to provide me with the discount. So, after my bill rung up, I paid it, said thanks and headed to the door.

Now, I couldn't wait to see the bill as evidence of my experiment! And here's where I learned another lesson: Always Check Your Bills and Receipts. When I checked my bill, my discount was there - but it was on J$750, not J$500. So, I got a $75 discount, but the item had cost me $675 when it should have cost me $450 with my $50 discount on $500. I had paid more than the original $500! Frankly, I was deflated. This was not the way this experiment was supposed to go. BUT, I had learned to check the receipt.

So, I went back to the store employee and asked what caused the price difference. Turns out it was an error and the adjustment was made so that I was charged the price I saw for the item. So I got my discount, and had paid less - that was the point of the experiment and I had achieved it!

Bottom line: You can save some real money immediately by using discounts! Dollar for dollar in 5 minutes, the cost of NOT using a discount can exceed one whole YEAR's worth of accumulated after-tax interest. If you get a discount, the money saved can continue to earn interest! Even if there may be a problem, persist because it is worth it.

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If you are in Jamaica, a JAA card provides a network of approximately 200 local discount partners with discounts ranging from 5% to 55%. It has other benefits too, including overseas discount benefits but let's focus on the local discounts for tonight. Click here .Chances are you will find something on this list already relevant to your daily life. Although the merchants can change at any time - and some of the new ones have not yet been updated on the website, the categories are listed below and I have linked each one to the JAA website so you can see the current list. Click below and see the merchants!!

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Additionally, if you are a member of Jamaica National Building Society (that means you have any kind of savings account with the Society), you have similar access to the 200 discount partner network. Click here. There are slight differences from the JAA list. To get the discount, you need to show your JN 24/7 ABM card. Chances are you will find something on this list already relevant to your daily life. Although the merchants can change at any time - and some of the new ones have not yet been updated on the website, the categories are listed below and I have linked each one to the JNBS website so you can see the current list:

Two simple little cards - a JAA Card and a JNBS 24/7 (ATM card) - are a great place to start to get those extra $$$$! You can get a JAA card by insuring with NEM, or purchasing membership directly from the JAA (see rates here). Keep a savings account linked to JN 24/7 ATM/Debit Card and receive your card to show for discounts!

Let's talk about benefits and rewards tomorrow!