Research cited on the Barking Up the Wrong Tree website says “almost any sign with a number promotion leads us to buy 30% to 100% more than we normally would”. But other studies – including an in depth evaluation of pricing and shopping published on the United Kingdom’s Office of Fair Trading website – suggest ways shoppers can tip the balance back towards their favour.
1. Don’t be pressured to “buy now” When offers are only available for a short-time, pressure to buy now or miss out can mount and change the way we think about them. Made “scarce”, evidence suggests we might think an item itself (or the deal offered on it) is better. So be aware – consider shopping around despite time pressure – and try to objectively think through the costs and benefits.
2. Do research the market When we know what a TV, roast chicken or hotel room should cost, research says our memories can kick in and past experience helps us weigh up if an item on sale is a good deal. Apply the logic more widely on less known items, by shopping around and checking prices in store or online before buying.
3. Don’t just go for the middle Presented with a low, medium and high cost options, there may be a bias to go for the middle. In behavioural economics terms, the highest or lowest price may “frame” what we expect to pay. Stop and consider what’s important – if it’s a classic piece, such as a refrigerator expected to last decades, the higher priced appliance might be justified.
4. Do ask if the pre-discount price is realistic Simply seeing the word “sale” can make us think reduced items are a good deal – studies (including Princeton University research from the 1980s) have shown it. But question if the pre-discount price was market rate or whether it was already high.
5. Don’t be sucked in by “free” So-called free deals include buy-one-get-one-free, free delivery and children travelling free with an adult. Academic and writer Dan Ariely has written widely on the lure of this f-word but, as they say, there’s no such thing as a free lunch. Costs can be worked in another way. Even the buy-one-get-one-free deal offers sellers potentially higher sales than simply giving a 50% discount.