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Why Do Sales Make Us Irrational Shoppers?

Why Do Sales Make Us Irrational Shoppers? shopping Buy One, Get One!  Get 50% Off!  Save $20 Instantly!  Huge New Years Sale!

Did I make you want to got out and purchase what I am selling?  Well…..Did I?

Being in marketing, I understand that if you want to get something to sell, you need to discount it or at least perceive that you are providing a discount.  Oops, I said it.  Not all sales are actually discounted prices or true sales.  I might be thrown out of a few marketing associations, but hopefully people knew that.  Did you know that?

Well, after thinking about it a little more, I don’t think a lot of people actually know about this practice.  So, why do you think sales make us irrational?

My Take

Not that my opinion really matters, but here is my take on why we become irrational when it comes to a sale.  Sales are typically either a percentage off or a dollar amount off.  They also usually have an expiration date.  When we see that we can save money on a purchase that we might have made and then see that the savings has an expiration date, we tend to throw rational thoughts out the window.

If you were doing regular shopping, then you might think if the purchase is necessary, see if there is an alternative, find coupons, or do some comparison shopping.  We take our time with the purchase, especially if it is a large purchase.  I did all of these when I made my couch purchase.  I wasn’t in a hurry when picking out a couch, so I took my time to make a rational decision for our needs.

One example of when we throw common sense out the window is when the “Buy X amount and get X” sales come about.  When I ran my ecommerce business, I would do a few tests to see which sales would work the best and how people would react.  I love analytics and following how people respond, so that was fun for me.

When I would place up a “Spend $100, Get 10% Off” sale alongside a “Spend $100 and Get Free Shipping” sale, I would see some crazy results.  People were allowed to choose which sale they wanted to use for their purchase.  7 times out of 10, people would select the “Spend $100 and Get Free Shipping” sale.  The funny thing was that if they looked, they would save more money with the 10% off sale because ground shipping only cost $5.99!

This just shows how people perceive sales.  People love free shipping and many won’t do the calculation to find out which sale is technically better.  Instead of using common sense, they have thrown it out of the window and went with the sale that pleased them more.  They perceive a better value with regards to free shipping.  Why do we do this?

I think we stop being rational when we have deadlines and we think we are saving money.  We all want to save money, but we fail to do the appropriate research to see which deal is best and which one saves us the most.  We turn completely into emotional buyers and a sale just makes us feel better for spending the money.  We probably planned to make that purchase anyway, but now we have the extra push to pull the trigger.

Your Take

The purpose of this post was not to make you think that everyone is irrational when it comes to sales.  I don’t think that is the case, but I do think we forget about rationale and make the purchase decision based off of a perceived sale.  I really want to hear what you think about this.  Do you think we become irrational around sales?  I mean, if you have shopped during Black Friday, then you know what I mean.

Let me hear from you.  I want to hear your opinion on this.  Why do sales make us irrational shoppers?

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About Grayson Bell

I am an average Joe, who built up over $50,000 worth of credit card debt and had to learn how to break it back down. It took 4 years of learning budgets, secrets, and many other personal finance tricks in order to cut the debt to $0. Now, I push to teach others not only how to get out of debt, but how to use credit wisely and how to start growing their wealth. You can view my other site, Sprout Wealth for ways to grow your money. I am also a freelance personal finance writer who provides staff writing and ghost writing services.

41 comments

  1. Good stuff! I think the frustrating thing for me about sales is that I don’t know when the item I want will be on sale again. If it never goes on sale, I may have missed my opportunity. I then have to shift priorities if I really want a discount on the item.

    I don’t think that’s the prevalent view, though. I think a sale makes people irrational is that they think they’re getting a “deal.” We’re so primed for “deals” now that we don’t think “do I need this” and “can I wait.”
    AverageJoe recently posted..How I Learned to Avoid Bone-Headed Financial MovesMy Profile

  2. I think it is fear of missing out. We all want to save money and if something looks like a good deal we don’t want to miss out on it if the price goes back up. It is all psychological and many people fall for it.
    Glen @ Monster Piggy Bank recently posted..Forex Currency Trading Basics For Beginners – Part 1My Profile

  3. I would agree with Joe, in that I think a lot of people get caught up in the feeling of getting a deal that all sense will go out the window in order to buy it. I hate missing out on a sale, but at the end of the day, I pass up on it if I do not have the money and discern that it is not a true deal. Doing research can be key to this, plus also knowing (as an advertiser) that they’ll do just about anything to part you from your money.
    John S @ Frugal Rules recently posted..Things That Make Me Scratch My HeadMy Profile

  4. “I love analytics and following how people respond, so that was fun for me.” Two things I love as well! As far as sales, I think we are so used to sales now that if something ISN’T’on sale, we probably wouldn’t buy it unless it was an absolute necessity. I want to get more into the practice of finding things I know I will need and waiting for the best deal. It’s the shopping when you need it asap or think you need it asap that you get strung into a lot of the sales gimmicks.
    DC @ Young Adult Money recently posted..Why I am reconsidering getting my MBAMy Profile

    • I have been caught before knowing that I needed something and then I hear about a huge sale and that makes me go out and look. I still come back with information and price compare.

  5. I think it’s because if you think you’re getting a deal, then you start thinking of how that item can be useful to you. I just try to avoid shopping altogether!
    Michelle recently posted..Is a Business Degree a Waste?My Profile

  6. Whenever there is a sale, we become impulsive buyer. The thought of letting the pass the opportunity is always there. I remember last time when I shopped during sale madness, I patiently waited 3 hours on long lines just to avail a discounted item. Too late when I found out that the same item was selling at the competing mall with the same amount that happens to be the regular price I bought it for. I almost cried for 3 hours I wasted.
    Cristina recently posted..Portrait of a FreelancerMy Profile

  7. Perceived value is a powerful thing and has certainly encouraged me to shop more frequently than I should. That being said, these sales, discounts and promotions can be helpful when used thoughtfully. For example, I wanted a pair of jeans from a particular retailer but didn’t want to pay full price. I waited patiently until a 50-percent off sale — coupled with a rewards card — enabled me to purchase the pants for $50 less than advertised. Ultimately, I think the real challenge is identifying how the sale can help you actually save money without allowing it to influence you beyond your means or intentions.
    Kendal @ HassleFreeSaver recently posted..Savings Tips for Family TripsMy Profile

    • Sales can be quite helpful, but you still have to use common sense when doing the purchase. You did when you waited for the sale and you knew that you were actually saving.

  8. I don’t think that it’s just that people don’t take the time to do the calculations in their head, I think it’s more that people CAN’T mentally do the calculations. You must have been out to eat with people at one point or another you couldn’t figure out how to make a 15% tip in their head. It’s kinda like that.
    Johnny Moneyseed recently posted..Reducing the cost of commuting by movingMy Profile

    • I agree that calculations like this can be difficult, but it is not like the sale is going to last for 2 minutes and then it is gone. Cell phones have calculators and most percent off sales are not difficult to calculate if you take a step back. Maybe math is dying.

  9. Girl Meets Debt

    WHAT??? Are you trying to tell me a sale isn’t really a sale? :P

    I’m a lot better at shopping than I use to be and now I just buy things that I need and I try to score them on “sale.” For instance, the other day I ran out of handsoap and saw that Bath & Body Works was having a “sale” for 6 for $25 hand soap. Not sure I needed 6 but oh well. Marketing has to work on someone lol
    Girl Meets Debt recently posted..Girl Meets Debt’s ManifestoMy Profile

  10. Nothing irritates me more than a 10% off sale! It even makes me think negatively about the company because I feel they’re being cheap. Yet as you say when I’m offered free shipping with no strings attached I’m happy with the deal even though it might save me less money. Strange thing the human mind, or maybe I’m just strange. :-)
    Money Bulldog recently posted..Investing for Beginners ~ What Is Copy Trading?My Profile

    • Interesting response. I didn’t think people got irritated with sales. No offense, but I would have loved you when you shopped at my online store. You would have netted me more money on each order. It is strange when we think about how people react to certain things.

      • No offense taken Grayson, you’re right you would have done well out of me. Hope I didn’t offend either, I wasn’t meaning you. I had a specfic company in mind who constantly email me with offers that don’t stack up when you consider the original price of their products.
        Money Bulldog recently posted..Investing for Beginners ~ What Is Copy Trading?My Profile

        • I do hate when I see 10% off things that are $5 and $10. It really doesn’t amount to anything. I also don’t like it on the other end of the spectrum when things are very expensive and you are only getting 10% off.

  11. That’s pretty interesting about the 10% vs. free shipping. I do admit I get that excitement response when something is 40% or more off and used to impulsively buy with a lot of “justifications” behind it (i.e., what if they don’t have my size after I comparison shop, what if the style I want runs out, etc.). I guess it’s like a feeling of winning when getting a great deal, when you’re really just spending unnecessarily.
    anna recently posted..How the Man is keeping me down from side income (okay, not really)My Profile

    • Great example Anna. It is the excitement response that makes us purchase. The sale also becomes our justification to make the purchase after all.

  12. You know I was talking to Mrs.CBB about this yesterday after going to the new Target that opened yesterday. It was big, bright and colourful but we didn’t see any ‘SALE” or “BOGO” or “reduced” signs anywhere. It was fresh and as new as it gets. We weren’t drawn to anything as it all had “reg” prices. It’s true that if you want something to sell make it look like a deep discount or bargain. Another example is these pot sets for the kitchen we have here, I kid you not they say Reg price $699 Sale $199 and we see it ALL the time like we did yesterday at a shop. Mrs.CBB said, why don’t they just put the right bloody price on these.. The answer is simple, it sells, end of story.
    Canadian Budget Binder recently posted..February 2013 Canadian Budget Binder Budget Update #2- Big Ticket Expenses Hurt!My Profile

    • Glad to hear that you got a Target. I love that store, but they don’t have deep sales nor do they advertise a lot of sales. Their prices are low enough and they don’t need to tarnish their brand with fake discounting.

      Funny comment about the pot set. I see “sales” every week about the same thing that is only on sale this week kind of deal. You wouldn’t think it was a deal at $199, but when you see that it is $500 off, then you think about it more.

  13. We’re like Pavlov’s dogs when it comes to sales. We’re conditioned to sit up, take notice and buy, buy, buy. I certainly enjoy a good sale, but you’re right that we need to remember they are a marketing tool to get us to buy and often more than we need. We need to be the one to outsmart the marketers! But we hate missing out on a good bargain and a limited supply.
    Shannon @ The Heavy Purse recently posted..Meet Shannon Ryan: Financial Literacy AdvocateMy Profile

    • Shannon, did you just call me a dog? ;) This was something that we are taught in marketing class. Create demand and reduce supply. This will keep them coming each and every time!

  14. The entire point of the sale is to plant the idea in your head that you are getting a deal that you wouldn’t ordinarily be able to get. I think where most of us fail to in doing the math. I suspect that if you got over the emotional aspect of “the sale” that great deal wouldn’t look that great after all. Buy one get the second Half off is a classic example at Kohls. Get a $30 set of gym shorts and get the second one for $15. $45 for two sets of gym shorts, $22.50 each on something that is horribly overpriced to start with. I usually wait until they hit the 70% off rack, whip out my 30% off coupon and pay $6.30 for one! :D
    Jose recently posted..Investing in Stocks and The Stop LossMy Profile

    • You got it on point Jose. Kohls is notorious for doing this kind of stuff. They now have the electronic price tags that put the sale amount in bold.

  15. Seems that you feel like you are going to miss out on something because of the limited amount of time of the sale. I would guess that individuals that shop more often are more likely to buy during a sale. I tend to purchase items slowly and spend a lot of time searching and comparing. I am less likely, I feel, to purchase because of a sale.
    Steve recently posted..Majority Of Americans Against Cheating On 2013 TaxesMy Profile

    • Oh, I know I am not going to miss out on anything. When I purchase things, it is rarely on impulse and I know how long the sales are and what the real discount is.

  16. Justin@TheFrugalPath

    Great points Grayson. I think it’s funny how a local grocery store has advertised a “low” price on their milk for about 6 months now. They had a yellow sticker saying it was $2.50 and the “non” sale price was $3.19. After a while I caught on that it wasn’t on sale, just some gimmick. However, it worked because if I couldn’t find milk on sale I would go there to purchase it.

  17. I’ve definitely purchased more than I’ve needed of certain things in the past because they were on sale. Buy one bag of potatoes get one free. Unfortunately there’s only two of us and bf doesn’t really eat potatoes, so I ended up throwing away a whole bag, which made me feel bad. That’s a small example, but you get the idea. Now I just buy one bag, even if I can get the second for free. There’s no sense to waste a whole bag that someone else could eat (or I try to give away the free item to a friend).
    KK @ Student Debt Survivor recently posted..Advice From Your TherapistMy Profile

  18. Yes you are so correct about our irrationality regarding sales. Being a consumer and media driven society we are sold into believing we need to be emotional about purchases. We also are made to believe we need things right now, rather than being like people after the great depression who saved for things. Sales exaggerate this belief and capture our emotions.
    Jim recently posted..Death Panels Phooey, Here Is How It Will Really WorkMy Profile

  19. You’re right, it is a big mind game, however we like it and as long as we take advantage of it and not get taken advantage of ourselves I think we’re ok.

    These days there is always a sale going on, at some store, somewhere, and you can probably investigate it online. Say you need to buy a printer, Amazon, Staples, Office Depot, Best Buy, Newegg, etc, etc… at least one of them has to have a sale and you’ve scored. Cause at the end of the day, who cares where you got it from as long as it was a killer deal! ;)
    Listen Money Matters recently posted..Build Credit Without A Credit CardMy Profile

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