Beware of "bargains"
Today, Tim and I went to Peter Piper Pizza. It's a Chuck E Cheese-esque place. Still, Tim wanted me to check it out, since he worked there while he was just out of college. We came, we snacked, we played. It was a nice outing.
I felt okay about spending a little money because it was a bargain: $4.99 for a pizza buffet. Sounds great, right? Actually, not so much.
Picture a 14" pizza. How many slices are you actually going to eat? Most women will be done after 3 or so slices. Most guys would probably be done after 4 or 5. That means you're paying $1 or more per slice. Between the two of us, Tim and I had 7 slices. Soda wasn't included. So we paid $1.42 per slice. Two hours later, Tim was hungry again, three hours later, and I'm starting to feel it too. I'm not saying we were financially gouged, but we didn't really get the bargain we were expecting.
Of course, stores do this all the time. It's their prerogative to make their prices sound as attractive as possible. Grocery stores often have sales where certain items are deeply discounted, but many prices are only marginally better. I've seen "sale" items marked down by a whopping 30 cents.
But the strategy works. Seeing that something is on sale has a couple of psychological effects on us.
1. When you assume...
Problem: Shoppers can be persuaded to buy something simply because it's on sale. If it's on sale, after all, it has to be a good deal, right? Uh, no. Actually, plenty of sales are not that far off the normal retail price. Now, if you needed to buy that item anyway, any savings is great. But most of us, at some point, have fallen for the sales-sticker ploy.
Solution: Do your due diligence. (Try saying that five times fast!) Before you do your frugal-find dance, look at the regular sticker to find out what the non-sales price is. Of course, worthwhile savings is a completely relative term. Some people would be happy with 50 cents off. I prefer $1 or more. Ideally, you'll be keeping an eye on sale cycles, so you can also compare the current sales price to what you could pay later in that cycle.
2. I Need it now!
Problem: Sale signs create a sense of urgency. It's on sale now! It won't be on sale next week. So you have to buy it now, while the savings are there! This sense of urgency is a salesperson's best friend. It makes you buy on impulse. You don't want someone else to have the thing you desire. And it's fresh in your mind, so the desire is prominent. If you have time to think it through, your feelings may change. So a smart marketing team will put a time limit on any deal.
Solution: In most situations, you actually have plenty of time. Deadlines are often artificial. Many times, you can convince a manager to honor a special that has just ended. Some stores even have price matching. If you see a lower price in the one to two months after your purchase, you can bring in the ad, along with your receipt, and the store will give you back the difference.
Of course, places like grocery stores generally don't have such options. But one common mistake people make is to assume that any sales price is for only one week. In fact, most grocery stores have at least a few sale items that are discounted for a whole month. Check the sales sticker, which will tell you how long the sales price is effective. You may have the breathing room you need to make a decision.
3. In sight, in mind
Problem: One of the most potent aspects of the sales sticker is simply this: It attracts your attention. You go to check it out, and you consider its purchase. Sure, there are plenty of people who walk away. There are also a lot of people who buy.
Once we've seen something, our body and mind respond. You see Haagen-Daaz on sale, you'll probably crave ice cream right then and there. You're at Target shopping for a closet organizer, but look at the sale on frames! Weren't you thinking about getting a couple more anyway?
But maybe you're strong; maybe you pass by that ice cream and home decor. Nonetheless, the item has your attention. You'll start to notice all those photos sitting around -- ones that you had become oblivious to before. Commercials and ads will catch your eye more, because the product is already in the back of your thoughts. In short, there's a good chance you'll end up buying the product no matter what. Hopefully, you'll wait for a coupon and a sale, but you may just cave one night when those decorative little ice cream pints are dancing in front of your eyes.
All that effect, just from one little sales tag!
Solution: This one may be the hardest. Marketers test out different color schemes and fonts to see which ones are the most attention-getting. The stores place sale items on display, so that you can't help but see them.
The only real method I know of is sticking to your list. Religiously. If it's not on the list, it's not in your bag. Of course, this doesn't help when you're making the list: Weekly circulars flaunt products that suddenly begin to seem necessary. Sure you don't need a fryer. But think of how much you'd use it! It'll pay for itself... and then some!
So maybe there's no complete solution to be had here. A lot of it comes down to remembering priorities: What do you need, what do you want, and what luxureeds will you allow yourself?
So what does all this mean?
Well, it means you're human. People are being paid to manipulate you, and they're good at their jobs. The main way to defend yourself is to, as always, be vigilant. Make sure you know what you're getting for what you're paying. Check out the details of any "bargain" to ensure you're getting your dollar's worth.