Let’s admit it: Shopping is fun! Acquiring new things is exhilarating and the process of finding what you want is gratifying. That’s because many of our shopping decisions are based on impulse, and this is no accident; businesses have extensively researched methods to drive sales, and these retail strategies have proven effective time and time again.
Since these gimmicks influence spending so expertly, it’s important for consumers to recognize them and break the habit of impulse buys. While discounts can help you save money and some rewards cards are actually valuable, don’t fall prey to the following tactics that will drain your wallet.
Advertising. One of the biggest ways retailers influence shoppers is through advertising. From the way prices are displayed to the wording in an offer, buying is a psychological game and retailers have an arsenal of tricks to guarantee sales. A common tactic cited by KeepThrifty.com is selling a non-feature. Non-features are things that aren’t relevant to a product or an “add-on” that isn’t beneficial. For example, getting free shipping on a digital e-gift card is not added value, since it costs nothing to send an email. However, retailers highlight “features” like this to entice buyers into thinking they’re getting more bang for their buck. When researching a product, remember this tactic and ask yourself if the “features” are really beneficial, and always beware of misleading advertising.
Time limits. Anyone who has watched an infomercial is familiar with the uncomfortable pressure of being tempted to buy something “within the next 60 seconds before this amazing deal ends!” This is a tried-and-true tactic that creates a false sense of urgency and appeals to the consumer’s impulses to act right away. The time limits associated with countdowns and weekend-only sales are effective methods of getting consumers to visit stores and spend money. Merchant email newsletters do this frequently, using headlines like “don’t miss out” and “only hours left!” Typically, with the exception of Black Friday and other major sale holidays, that same deal will likely roll around again. Instead of signing up to be overwhelmed by temptation, use a coupon site like Coupon Sherpa when you’re ready to shop at a particular store. Stores often issue online vouchers during peak promotional times and during periods of slow traffic, and you can take advantage of these deals when you’re actually ready to!
Displays and ambiance. Nothing sells a hot new cosmetic item or expensive outfit like a well-lit display. Similarly, inviting smells also lead to more sales, while catchy pop music is used as a backdrop to make the store more appealing. Catering to our senses is a surefire way for businesses to tempt us, combined with how they present their merchandise. The layout of a store is also essential to how the customer shops. High-priced items are typically positioned at the entrance, while clearance and sale items are usually stored in the back to entice shoppers to go through the rest of the store before reaching them. Large signage and bright colors like red and orange are used to make the customer feel like they’re getting a deal, and allowing consumers to touch or handle the merchandise often leads to more sales.
Price tags. Price tags are also a way for retailers to experiment with psychology. A Cornell University study suggested that people spend more in restaurants when the dollar sign is omitted from the menu. Similarly, prices ending in 9s often seem like less than a whole dollar amount, which is why we always see prices rounded up to .99. Price tag colors also can have an impact on the buyer, which is why clearance and sale tags are often yellow or orange.
Anchor pricing. Anchor pricing is another sneaky tactic that retailers use to influence consumer spending. In an example from The Simple Dollar, two pairs of headphones are priced at $11.99, only one pair is discounted from $19.99. Since the blogger didn’t research the earbuds prior to shopping for them, he doesn’t have any way to compare the two except for the price set by the retailer. Since one pair was originally higher priced, he assumes that one is the higher-quality product and believes he’s getting a bargain because it’s marked down. However, he finds out later that both pairs of earbuds are similar in terms of user reviews, making him question whether he got the better end of the deal. Ultimately, the best way to combat anchor pricing is to do your research ahead of making a purchase so you have more information on which to base your decision.
Freebies and samples. How many times have you received a free sample while shopping and then felt guilted into purchasing something? This method of social pressuring has worked for Costco for years. It’s suggested that freebies often make consumers feel obligated to buy a product or service, especially when others around them are grabbing samples as well. After all, nobody wants to be thought of as a freeloader, and when the salespeople cater to our emotions and try to get to know us, we often can’t help but oblige them with a purchase. However, recognizing freebies and samples as a sales tactic should help you enjoy something for free without guilt! If you particularly sensitive to this strategy, just say “no thank you” and walk away.
Loyalty cards. Though loyalty cards can be beneficial, they often incite more spending than saving. If shoppers are bound by loyalty to a certain store, they’re less likely to shop around for a better price at other stores. This is especially true with grocery stores, since many loyalty programs reward users with discounts on fuel. Points systems also prompt consumers to spend more to reach a certain threshold to be eligible for gifts, rewards or special coupons. These discounts are attractive, but the amount you have to spend to earn them cancel out any savings you receive. Enjoy the discounts as they come from your normal, budgeted spending, and avoid letting points accrual or the offer for special savings influence you!
Point-of-sale add ons. Retail trickery is not limited to brick-and-mortar shops. Online retailers love to flash enticing merchandise by you just moments before you make your final purchase. Pop ups and advertisements stating “you might also like…” are common on sites like Amazon. It’s easy enough to buy something online, and merchants know adding something else before checkout only takes one click. What’s more, they know your purchase history and select items based on your preferences, making it harder to pass up something you might actually be interested in.
Quick-and-easy checkout. One-click buying is patented by Amazon, and enables customers to make a purchase with just one click. Other e-retailers offer to save your payment information for expedited checkout. While both of these options are convenient, they make it far too easy to spend money. PayPal, for example, has expedited the purchase of everything from clothing to airline tickets to professional services. Since stores count on consumers making impulse purchases, this method is highly successful for driving sales. From a consumer standpoint, it’s best to hold strong and opt for slower checkout options to give yourself an opportunity to reconsider the purchase.
Kendal Perez is the Savings Expert for Coupon Sherpa, a popular resource for online, printable and grocery coupons. She’s a go-to source for money-saving tips and has been featured in stories from Bankrate, GOBankingRates, Wisebread, US News & Money Report and more. You can find Kendal on Twitter @HassleFreeSaver.
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