As we approach the season of sale mania, please apply a healthy dose of skepticism toward the “deals” you think you are scoring.
Here’s how retailers fool you.
The signs, emails or text messages trumpet massive price cuts. You get excited about the discounts, proud of your smart shopping skills.
In truth, not all sales offer the savings bonanza you think. The in-store and online markdowns are like being asked to dance by a smooth, overly excited partner. They spin you around so fast and so relentlessly that you get completely dizzy and lose your bearings.
Why are we so susceptible to the discount dance? Because, over time, retailers have trained us to avoid paying full price.
When executives try to be truthful to consumers about sales promotions, they pay the price. In 2012, Ron Johnson, then the chief executive of J.C. Penney, made the bold — and ultimately doomed — decision to do away with the discount dance.
Johnson came up with the idea of switching to everyday low prices. Sales plunged. The new pricing alienated core bargain-hunting customers. It was as though a bad tango partner had dropped them to the floor.
Johnson was criticized for failing to understand how discounts instinctively motivate shoppers. He was ousted after less than two years on the job.
The truth is, sales make us irrational and therefore vulnerable to an array of marketing ploys. If you’re not wise to the tricks, your Black Friday shopping could send you into the red. Here are seven moves retailers use to make your head spin and manipulate you into thinking you’re getting a good deal.
The buy one, get one deal
The sale sign says: “Buy one, get one 50 percent off.”
And why wouldn’t you want to take up that offer?
Well, it’s probably not such a steal if you realize the seller has factored the discounted item into the price of the original item.
If you’re not careful, a BOGO promotion will push you to buy an additional item you don’t really need, which means you just overspent. Or the “regular” price of the item might have been inflated to make the second one, sometimes marked as “free,” seem like a better deal than it is.
The scarcity scare
I’ll admit, I’ve fallen for this when shopping online. I see an item I want, but in red letters, there’s a warning: “Only two left in stock. Hurry.” I panic and waltz right into the snare, fearing that if I don’t buy it right away, I’ll miss out on that must-have item.
That warning might be true. But don’t rush your decision-making, which in itself often leads to overspending. Instead, step away from the screen. This allows you to reassess whether the item is a need or a panic response.
The spend more and save strategy
Here are examples of this strategy: “Get $20 off when you spend $100” or “Save 30 percent when you buy four or more.”
The pitches make you feel like a fool if you don’t increase your spending; otherwise, you’ll miss out on a fantastic deal.
But again, this emotional pressure is designed to trigger impulse spending, and could easily bust your holiday budget.
The shipping threshold trick
To get free shipping, you’re psychologically manipulated into spending more to save.
“You’re just $10 away from free shipping on your order.”
How could you let a small amount keep you from paying $7 to ship your order to your home? You end up adding more to your shopping cart to avoid a smaller shipping charge.
Yup, they got you.
The countdown clock
This is a very successful strategy, even for procrastinators.
“Sale ends today!”
“Today only, 50 percent off.”
The goal is to create a false sense of urgency or play into the fear of missing out. Often the “limited-time offer” isn’t the only chance to get a deal. Wait, and another promotion will show up soon.
The price anchoring trap
Retailers set a high “original price”(the anchor) to make the sale price look like a massive markdown. However, the item is rarely sold at the regular price.
The point is to establish a false reference point for the item’s value. Your brain focuses on the perceived savings rather than the final price. You’ve been had.
One way to counter this trick is to track pricing.
Check out CamelCamelCamel, a price-tracking browser extension, or Keepa. These websites provide a useful price history on items sold online, helping you determine whether a sales price is overhyped.
The bundle set discount
You want to buy a new laptop for your college-age child. The computer (the lead item) is bundled with other items, such as a computer case or a basic antivirus subscription, neither of which is needed. Packaged together, it appears you’re getting more for your money.
You end up spending money on products that you don’t really want or need.
Here’s something that I practice to combat falling for sale tricks and traps. Slow down the time it takes to buy something. If you’re shopping online, park the items in the cart for a few days. If you’re planning in-person shopping, make the first trip a reconnaissance mission to check prices against what you can afford.
The more you pause and rethink your purchases, the less you spend — and the more likely you’ll save.
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