Free necklaces and shipping for holiday shoppers?

The Associated Press

 NEW YORK — Retailers are so desperate this holiday season that they’re willing to lose money to get you to spend yours.

Take online jeweler Stauer. It’s offering a $249 amethyst necklace for free — provided customers pay the $24.95 it costs to ship it. Stauer will lose money on the deal, but it hopes to reel in new customers who will buy other jewelry.

“In this economy, you have to be outrageous in your offers,” said Michael Bisceglia, the president of Stauer who found that more than a third of customers who took advantage of a similar deal on a $179 pearl necklace in 2009 bought additional items. “You have to shake up the world a bit.”

Not every retailer will go as far as giving away merchandise during the holidays, but many will offer profit-busting incentives. It’s a critical time of year for merchants, who can make up to 40 percent of their annual revenue in November and December. And they’re so worried that Americans are spooked by the weak economy that they’re willing to sacrifice profit for sales.

Many Americans are cutting back on spending as they grow increasingly concerned about the stubbornly high unemployment rate, stock market turmoil and an overall fragile U.S. economy. In fact, a recent Gallup poll found that eight of 10 Americans think the country is in a second recession.

“Retailers are now scared because some believe they’re in a second recession,” said C. Britt Beemer, chairman of America’s Research Group. “And the second recession is hitting them in the biggest shopping season of the year.”

Despite the challenging environment, revenue in November and December is expected to be up about 3 percent.

Printed on Thursday, October 20, 2011 as: Retailers offer discounts to keep customers