The other day I went to a local hardware store looking for a good deal on a set of drill bits that I needed for a small project at home. I noticed that there were several different brands that had similar products, but the prices were very different (from low to high). Then, I saw a package that said: “½” Metal drill bit included!” and the bit was in the front of the package. I thought, wow, competitive price (it was the one that was on the medium price range) and they are including a ½” metal bit for free. But that was far from the truth!! The drill bit was not free, (I found out reading the small print) the package just gave me the illusion that they were including it for free, and that I was getting a great deal!! This was a retail trick!
The truth is that most retailers and products packaging use clever techniques to get you to think that you are getting a good deal. These days everyone knows about these tricks, but what people don’t know, is that:
To become a savvy spender and to be able to save more money every week (from groceries, to hardware stores, to essential bills) you need to check out and understand these four tricks used by retailers to get you to spend more (without you knowing it).
- The Dollar Sign: A Cornell University study shows that menus that have prices without dollar signs (for example: Cheeseburger, 11) get you to spend more than menus with prices that include dollar signs (Cheeseburger, $11). Restaurants do this all the time and it is a very effective trick, making people spend an average of 8% more! Don’t believe me?? check out Cornell’s study HERE, you will be shocked.
- The price game: Retailers price things at $0.89, or $.99, rather than even prices. Tagging a product with a $0.99 tag, causes you to routinely round down. At a $2.99, price, we tend to think of the product as costing $2 instead of $3. This make you more likely to get the product, because it gives you the impression that it is cheaper. Same happens with $.89 and $.98. it has the same effect on people’s minds, and retailers know that.
- Limited time offer: Retailers use this subliminal message to hurry you into buying the product, because that product “may go away for good”. Remember the McDonald’s MacRib® sandwiches? They have been on “limited time offer” or “finally coming back” since 1981!!! Don’t fall for it! the truth is that if a product is selling well, it will be available eventually, and you will be able to get it if you really needed to, (not that anyone needs a McRib®!)
- Blending prices on threes: Imagine you find a pair of jeans you love (and that fit perfect!) but it costs $100, too much for you, so you return it to the shelf. Then you see right next to it a similar pair of jeans, but on the one side cost $60 (Usually of a lower quality) and on the other side the one costs $80 (usually of a similar quality than the one in the middle that costs $100). Stores do this all the time to make the less expensive jeans (the one they wanted you to buy from the beginning) look like a great deal!
- Per-Customer Limits: “Limit 60 per customer” I read that on the same hardware store referring to the mulch that was “on sale”. Limiting items is a trick retailers use to create the illusion of scarcity, and to make you feel that you have to have 60 bags! But do you really need 60 bags of mulch? Just because you can only buy 60 (or whatever number) items doesn’t mean you should.
If you save an average of $50.00 a week, paying attention to these 5 tricks and with a few small improvements, you just gained $200 a month. That is money that can be used to get you and your family out of debt, or to invested to earn more cash. If you do this over time, you will be in a much better financial place than if you continue to let retailers fool you into thinking you got a great deal.
The transition from consumerism to frugality is a hard one, but it is a necessary one. Especially when retailers want you to spend more and more, and we live in a society that prides itself on the amount of stuff one can accumulate. Here at Saving For Hope we pride ourselves in saving our hard earned cash, to make it work for us instead of the other way around. We also pride ourselves in helping and giving, something that our society seems to have forgotten these days. Don’t let retailers manipulate and bully you into spending more, as they take your cash away. Don’t be a fool, guard your cash at all cost, and use it to benefit you and your family. Enjoy!