Slideshows | August 27, 2014

Seven thinking traps that can suck in shoppers in sales

You’ve spotted a laptop on sale with 30% off. It looks like what you’re looking for. Plus the store is offering free delivery and there’s enough credit on your card to “buy now”.

Before snapping up the deal, it might pay to take a breath and consider the thinking traps that might be in play. Sale signs with numbers on them have been shown to increase the amount shoppers buy, according to a study cited here.

Shop around, consider cash-only
Simply seeing the word “sale” sparks thoughts of low price – even if that’s not truly the case. If the starting price is inflated, the discounted price may not actually represent a cheap deal.
Combat this by researching deals at other vendors.
Impulse buying a sale item with a credit card could come back to bite.
The bill is effectively paid a month or so in the future – reducing the connection between the “pain of paying” and getting the goods. Studies suggest this might have implications for overspending.




Once you start…

Deciding to buy one item may “open the floodgates” and increase the chances you’ll buy other items too. It is like going to the supermarket for one item and leaving with a bagful. A study from Stanford looks at momentum – urging shoppers to beware. Buying the sale item could lead to a few full priced ones too.


EUR20 is worth the same

Is a EUR20 discount more appealing on a EUR50 calculator than on a EUR1,250 laptop? Many of us will think so if we think about it as a share of the original cost. You may even be willing to travel to get the cheap calculator but not EUR20 off laptop. Remember the real buying power of the discount.


How much is full price elsewhere?

Simply seeing the word “sale” sparks thoughts of low price – studies (including Princeton University research from the 1980s) have shown it. But what if the pre-marked down price was inflated? Suddenly the sale price is not such a good deal.


Beware the power of “free”

The offer of free delivery, buy-one-get-one-free (BOGOF) and other “free” offers are designed to appeal. The power is so strong that academic and author Dan Ariely often writes the word in all capital letters as “FREE!”. Look deeper. Costs can be worked in another way – and BOGOF offers sellers the potential to shift more product than offering 50% off.


I’ll just put it on the credit card

Putting a sale item on the plastic can be an easy option but beware it might reduce the “pain of paying” that shoppers are said to feel more intensely when handing over cash. During sales season, consider withdrawing the amount of cash you are willing to spend and paying only with that.


Drip, drip, drip of extra costs?

The delivery is free, but what about software, fees for using a credit card, a charge for handling? Known as drip pricing, unadvertised extras make the true total cost difficult to compare with prices elsewhere.


Available “for a limited time only”

It’s a sales cliché but for good reason. Increasing the urge to “buy now”, limited time offers up the pressure to buy by making the item or deal seem more scarce.


eZonomics team
.(JavaScript must be enabled to view this email address)

Have your say

Should schools teach financial literacy?