Sales can be a narcotic. When customer traffic to your store slows down, it is always tempting to reach for the red marker and start making sales signs. This is what some of the big consumer electornics retailers have been doing to get shoppers into their stores, according to this report:

Circuit City for example, is offering no-interest financing for 12 months on all TVs that cost more than $299. And at Best Buy consumers using a Best Buy credit card don't have to pay interest on any purchase until January 2004. The consumer electronics chains are not alone, either. Sears is currently offering zero percent financing and no payments until July 2003 on its Kenmore brand of washers, dryers and refrigerators.

However this can be a dangerous strategy over the long term since you run the risk of conditioning your customers to expect big sales every time they go into your store.

"You always have to be concerned about promotions. Sales may materialize but profits may not," says Todd Kuhrt, a retail sector analyst with Midwest Research...

Another problem with these favorable financing deals is that consumers might not be as willing to spend on big-ticket items once the incentives are gone. This could hurt future sales. Ulysses Yannas, an analyst with Buckman, Buckman & Reid, a New York based brokerage firm that does not do investment banking, says that consumers are becoming increasingly savvy and are willing to hold out for deals...

Faced with that dilemma, retailers might have to extend the deals, which would continue to put pressure on profits. That's exactly what has happened with the big automakers.

Wal-Mart dealt with this problem along time ago with its "Every Day Low Prices" strategy. Wal-Mart never runs a sale so customers do not wait for a special before they go shopping. Customers know that the price they see today will still be there tomorrow, so there's no point in holding out. Other big retailers like Home Depot have adopted similar strategies.

Of course if you are a small retailer (and next to Wal-Mart, who isn't?) then offering rock-bottom prices every day is a sure way to be in bankruptcy court by year's end. But if only retailers spent half the energy they spend creating promotions and thinking up sales on ways to get customers to want to spend more money, not less. Why not invite your top 30 best customers for an exclusive wine tasting and unveiling of your new spring line of clothing?