Have you ever went inside a store, planning to buy one thing, but a big “50% OFF SALE” poster is staring at you right in your face. Just like that, you’re now leaving the store with an overflowing shopping bag. You may think you’ve just snagged a great deal, but what if I told you that you might have just spent more than you should have-
Brands and retailers are masters of psychology, using these subtle tricks to get you to spend more than you actually needed to. Let’s dive in and examine these sneaky tactics a bit closer:
Is That Discount Really Worth it?
When we see that red discount tag, our minds immediately register it as a steal, that we are saving money. However, that is not always the case. If you enter a shoe store and see a white basic shoe, and a colourful, limited edition one beside it with a “50% off” tag on it, you’d think that the colourful one is a better idea, right? In reality, the white shoe costs way less, even without the discount. The colourful shoe is what we call a ‘seasonal item’. It may have been ‘on trend’ before, but after a few months, stores will give this item a discount. For example, a limited edition running shoe costing $200 has been discounted to $100. Customers will compare this price to that of its original price and this will give customers the perception that they are saving money. $100 saved right? However, remember that basic white shoe? It might not have a big discount tag on it, but it’s been priced at $70 all year round. A discounted high-end product feels more valuable than a cheaper basic item, causing people to choose the discounted item, disregarding its cheaper alternative.
Does 1 Cent Really Make All that Difference?
Another strategy brands use are pricing items ending with .99 instead of a whole number. Items that end in .99 or .95 makes us think we are spending less. Spending $9.99 on a shirt feels way less than $10.00 right? An example of a brand that utilizes this strategy is Uniqlo. Almost all of their products end with .99, creating the illusion that their products are cheap, leading to higher sales. According to an article titled “The Left Digit Bias: When and Why Are Consumers Penny Wise and Pound Foolish” written by Tatiana Sokolova, Satheesh Seenivasan and Manoj Thomas, our brains focus more on the leftmost number, perceiving prices just below a whole number as significantly cheaper, even though it may just be a cent difference. This perception leads to the idea that these products are on sale, even though it is at its regular price, causing people to buy more with this “cheaper” price.
Buy 1 Get 1 Free!
Now this is something I’m sure all of us have encountered right? When you’re shopping at a clothing store, you might come across a Buy 1 Get 1 Free deal for a $20 dress. Instead of lowering the price of the dress, brands will bundle up a pair and make you think you’re getting one for free. If the price had been lowered to $10, you would have only spent that amount, but instead, this tactic tricked you, leading to an extra $10 spent. If you needed two dresses, this may have been a beneficial purchase, but if you were really only looking for one, you’ve been caught by this trap.
These are just a few of the tactics I’ve noticed that are designed to make you feel like you’ve gotten a great deal, even when you’ve ended up spending more than you needed. Hopefully this article can help you make smarter decisions for your next shopping spree! Make sure you spend only what you need, don’t be a victim to these subtle scams. If you notice any more strategies I haven’t mentioned, don’t hesitate to share them with us at pennies&thoughts! Until the next article
