5 Pricing Tricks You Might Be Falling For Each and Every Time
Your opponent is a giant. Larger than you could ever hope to grow and intent on getting every last dime you have. Your opponent is every retailer in the land. It’s every store you walk into, no matter you intention. Sure, they do not grab your arm and twist in order to separate you from your hard-earned cash. They are a subtle group that gets you to spend without even knowing that you are being influenced. It’s not just pricing that can get you to spend, but also paint colors on the wall, subtle lighting, and a number of other factors. Today, let’s just focus on the pricing aspect.
There are a number of ways retailers can influence your purchase patterns with just pricing. Look at gas stations for example. You see $2.12 on the sign, but the price is really $2.129 (close enough to $2.13). They just put that little 9/10 in small letters next to the large price. We gauge our interest based on pricing and we let go of our money based on a perceived deal. Here are 5 simple tricks that they use.
”Charm price” is retail slang for a price that ends in 9, 99, or 95. The idea is to get you to think the item is cheaper than it actually is. It works because people read from left to right. You see the first number in the price and make a decision as to whether the price is acceptable. So, retailers who want $2 for an item essentially get it by asking $1.99. You think you got a bargain and the retailer thinks that you have been tricked into a purchase you may not have made otherwise.
This one is a play on the charm price scheme. A business wants to make you think that you are affording a more expensive item by rounding the price to the nearest dollar. The idea is that there are no coins involved in the purchase. The underlying point is that if you wonder about pocket change, then you cannot afford the product.
Who wants to carry around coins anyway? They are a hassle and most banks don’t even accept them as deposits. That’s just craziness!!
Ten For Ten
Many stores are offering 10 for $10 deals. The hope is that you will not notice that you do not have to buy all 10 to get the low price, or that you may not notice that the same product in a generic offering is actually cheaper. For this reason, you should always check if the per-unit price is truly contingent on buying multiple units. Often it’s not. This seems to be a big one in grocery stores.
Limits On Purchases
Retailers want to convey to potential customers that a price is so low that they must limit how many each person gets. Additionally, retailers hope that customers will feel as if the item is scarce and they need to stock up. You used to hear this a lot on TV commercials trying to sell you those novelty coins or collective plates: “Limit 10 units per customer.” These days, this tactic seems to be gaining traction online as well, especially in the internet marketing community. For example, you will come across a website that exhorts you: “Buy Now! Only Five Spots Left!” Of course, if you check back two weeks from now, chances are these numbers won’t be different.
Buy-one-get-one-half-off deals are a favorite trick at retail outlets. Shoes stores seem to be very fond of this one. The idea is to get you to spend even more because you can get the next pair half off. Actually you could save even more by only buying one pair and going home. You will see these types of deals often. While shoe stores run them on a daily basis, even grocery stores run these deals. People salivate over getting a pair of shoes for 50% off, but if you are buying another pair you didn’t intend, then you are paying more and not saving anything.
If you do fall for any of these pricing tricks, then follow my impulse purchase savings plan. It will help you put more money away after you fall for these pricing tricks. When I do something like this (we’re all human after all), I make sure to stick the money in my Capital One 360 savings account or my Betterment account.
The tricks are so simple a third-grader could spot them, but they are so effective that millions of retailers use them around the world. Your best tool is to comparison shop and take advantage of any price-match guarantees that a retailer may have.
Author Bio: Author Jerry Coffey spent years as a “debtaholic,” struggling to escape a vicious cycle of credit card debt, payday loans, and struggling to make ends meet. Now debt-free, he writes for Repaid.org, a fast-growing personal finance blog.