American Bedwetter

Discussion

Limited time offers, coupons, promotion codes—why not sell stuff for a fair price in the first place? “Never give a sucker an even break,” W.C. Fields' line still holds today. Merchants agree with him.

Pricing schemes work in a variety of ways:

Time pressure

Sales and coupons that expire pressure you to make a decision while the better price is still in effect. This is a reasonable if you do indeed need the item, but merchants sucker you in with worries of regrets if you miss the deal. Beware! In trying not to “lose out,” you may find your hard-earned money spent on stuff you don’t need.

Over purchasing

“I better stock up while it’s on sale.” Again, “strategic purchasing” is reasonable if you can use the item—but if you won’t, or it will expire, it’s a waste of money.

Bypassing price comparison

A sale price may look great when comparing to the original price, but 25% off a 100% inflated price is a bad deal. In grocery stores, for example, the price of a store brand regular price is often better than the sale or coupon price of a name-brand item.

Impulse or Upscale Buys

The idea of a good deal seduces us: “I wouldn’t normally buy that, but perhaps while it’s on sale I’ll try it.”

Surrogate Sales

You are your own worst enemy on this one: since you’re getting a great deal on one product, you splurge on something else. “I’m saving so much on these 3 jars of spaghetti sauce, I can buy the fancy shampoo!”

Gambling Effect

The stress of adrenaline and the risk; the shot of dopamine when successful. When you bag a cherry deal, it feels great. But what about when you don’t? You feel bad, and in trying to feel better the result is often buying something else (and paying an unfair price) just to make ourselves feel like it wasn’t a total loss—we got what we wanted, even if we paid more. Furthermore, the “variable feedback schedule”—gambling—nature of this exploits human nature, encouraging you to do it more.

Merchants use sales because they work to drive sales, and a wise shopper can take advantage of them. But don’t be fooled or you’ll be taken. When you see a sale, get angry that they’re fixing prices to scheme you, and use that anger to counter the impulse to buy, and get them back by comparison shopping.

When you do need to buy something, don’t throw your money away—bide your time until the price is right. You can find almost anything for 10¢ on the dollar when you can wait for a bargain.

Here’s what you should remember about pricing games:

• Pricing games are come-ons to pressure you into a quick decision.
• “Only fools pay retail.” (Ferengi Rule of Acquisition #141). If you need to buy something, shop around.
• It’s not a great deal to get a good price on something you don’t need.

Website tips

The amount of tracking that happens on the Internet is staggering, and it’s all about money. Unless you erase your “cookies” daily, merchants know who you are immediately on arriving at their website. And even if you do clear your browser, you can be tracked by IP address, so they have a decent idea of who you are anyway. And to clarify: you have to login to access your account, but they know who you are long before that.

Some merchants now respond to “abandoned carts”. If you’ve put items in your cart but don’t checkout, after a few days they may send you a promotion/discount code in hopes of sealing the deal. This may be a way to squeeze a discount out of some merchants.

Worse than merchants are the “analytics” and social networking companies like Google, AddThis, Facebook, and Pinterest. The analytics companies get companies to connect them to their websites by offering analysis of shopper behavior. Social networking sites drive sales with “like” or “recommend” buttons, so merchants add those too. Either way, it gives these third parties access to your behavior across multiple websites. If I just shopped hard drives in three different stores, they all know what I’m in the market for, and every advert I see will be for more choices.

If you ever want an eye-opener, choose something totally unrelated to your life—golf if you’re a couch potato, baby stuff if you’re single, high-end jewelry if you’re not the type. Spend a while shopping different merchant websites. Then resume your regular browsing and note how your regular adverts change for the next few days.

TrueCost®

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