7 Telltale Signs a Good Deal Is a Bad Deal

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I love a good deal, don't get me wrong. But sometimes, what seems like a good deal turns out to be a waste of money. The signature of a bad deal is that you are spending extra money or time to get something you don't really need or wouldn't normally buy. There are lots of ways that savvy sellers can make a bad deal seem like a good one.

Here are some of the most common types of bad deals that people get tricked into thinking are good. (See also: The 6 Shopping Mistakes Keeping You From a Great Deal)

1. So Cheap, Might as Well Buy a Ton ...

When I was a freshman in college, a nearby fast food place had an amazing deal on hamburgers, selling three for a dollar. My roommate and I decided to stock up and buy 100 burgers to freeze and eat all semester to provide a cheap food supply. What could go wrong with a master plan like this? We ate all of the hamburgers that weekend! Instead of saving money, we ended up blowing a lot of extra cash and eating way too many hamburgers. The lesson I learned is that buying a large supply of cheap items to save money is not necessarily a good deal. Having a large supply of bargain items around can result in using a lot more than normal if you are not careful.

2. Supersizing

You might think paying a little more to get the next larger size is a good deal, but it is not if you don't need the larger size. You are likely paying more to get something you don't need, which is practically the definition of a bad deal. Why do so many people step up to a larger size than they need? The psychology of the deal makes spending only 10% more money to get 50% more product almost irresistible. Supersizing can be a good deal if you are sharing one supersized meal among multiple people, but few of us really need the extra calories and fat.

3. Buy Two, Get One Free!

Free stuff sounds great, but do you really want to buy two of something you only need one of in order to get a third one for free? It is hard to resist an opportunity to get something free, but this deal has a couple of downsides. First, there is the problem of having to buy two of something. That is likely twice as much as you would usually buy. Then there is the problem of having to store three items and try to use all of it before it goes bad, gets broken, etc. A deal like this limits your options. Let's say you end up with three bottles of mouthwash by taking a "Buy Two, Get One Free" deal. You might wish you could switch to a different kind after a few weeks, but you already have a six-month supply in your closet.

4. "Near Code" Items

If you see a display of highly discounted items for sale at the grocery store, it may mean that they are "near code." In other words, the bargain items are only a few days away from reaching their expiration date. Grocery items are usually good for some amount of time past the expiration date, but buying a large amount of these "near code" items to save money can be a risky deal. You can easily end up spending more money overall if some of the "near code" items do go bad or get thrown away by family members and are wasted.

5. Coupon for Something Expensive

One reason that stores and manufacturers put out coupons is to get you to try new products. Often these products are priced outside your normal budget at full price, but become affordable with a coupon. The problem with trying discounted expensive items is that the coupons don't last forever, and you might end up using the more expensive product all of the time. The $2 you saved with your coupon on the initial purchase will quickly be wiped out if you end up buying the more expensive item on a regular basis.

6. Product of the Month Clubs

I learned that you can get a lot of nice bottles of wine for a low introductory rate from a wine of the month club. But there is a reason product of the month clubs offer such a great sign-up deal — to get you started on a subscription that costs a lot of money over time. I stayed with my wine club for over a year and got to try some great wine that was delivered in a very convenient way, but it cost a lot of money. Eventually, I came to my senses and decided to seek out my own wine bargains at grocery stores for less than half the cost. It is easy to simply stay subscribed to a product of the month club when you enjoy the product and the convenience of automatically receiving it in the mail. This is the trap that product of the month clubs set, and it works!

7. Product Demonstrations

I once signed up to have an in-home demonstration of a vacuum cleaner in exchange for receiving a free prize, a $30 humidifier. Unfortunately, the vacuum demonstration turned out to be a two-and-a-half hour high pressure sales pitch for a $2,000 vacuum cleaner followed by a pitch to join a multilevel marketing (MLM) organization to sell vacuum cleaners to strangers to earn a free vacuum. Talk about a pleasant evening! The finale was that the sales person became so frustrated after she spent that much time and effort and was unable to sell anything to me that she stormed off and I never received my free prize. I learned my lesson — enduring a product demonstration or sales pitch is rarely a good deal no matter what free prize that is offered. At best, you will waste a few hours. At worst, you might end up buying an expensive item you don't need.

What seemingly "good deals" have turned out to be bad deals for you?