Monday, November 9

It's the new math!

According to Tim, we got a free Xbox 360 this weekend. Did we actually? Not even close.

Our old console had been making some rather ominous sounds lately. It made quite a racket when it ran, but we had gotten used to that. The last week or two, though, it had had trouble starting up. We would get an error message 2 or 3 times before it would turn on normally.

So when Wal-Mart released its Saturday deals, I was thrilled to see a special on Xbox 360s. If you bought the Arcade version for the regular price ($199), you would receive a $100 Wal-Mart gift card. You can use those gift cards at Sam's Club, where we shop relatively regularly, so it was basically a $100 discount on the system. So we're down to a $99 purchase.

Later that day, we went over to Game Stop and asked about trading in the old console. We could get $100 in store credit or $56 cash. Tim was shocked that I was even considering the cash. To him, a $100 credit for non-necessities was twice as valuable as $56 in cash to replenish our account.

In fact, in Tim's mind, the store credit made the console free. I think he learned a different kind of math than I did.

But I know this is the kind of math the stores want you to buy into. It's the reason Walgreen's insists that, if you get $5 in Register Rewards toward your next purchase, it's like that $10 item only cost $5. But it didn't. The next thing you buy will cost $5 less. In the meantime, you're still down the purchase price -- the whole $10.

It's only going to get worse as the holiday season nears. One of the newest fads, it seems, is for stores to have specials by giving you gift cards rather than actual money off. It's pretty brilliant, from a marketing standpoint. Your customers believe they're paying less; they have to come back in to spend the gift card; and they will probably treat it as free money -- despite having treated it as a discount -- and use it to splurge on something.

This all stems from the same twisted logic that grocery stores use when they tell you how much money you saved on your purchases. Most of our grocery purchases are based on what items are on sale. So if I buy them for 50 cents, I'm not really saving $3.50. I've spent 50 cents because it was a nice, cheap treat for Tim. I haven't saved anything. I refuse to think of it any other way. Rationalizations are just too easy to get caught up in.

What marketing ploys/rationalizations irritate you?


Blogger Shtinkykat said...

These "rebates" are only a good deal if you shop regularly at the store and you're only purchasing stuff you need. For example, Target will give $5 gift cards for purchases of some cleaning products. I need to buy the cleaning products anyways and I shop regularly at Target. In this situation, it seems to be a win-win proposition. But you bring up a good point -- some people treat discounts and rebates as a reason to splurge. "Hey, I'm getting 50% off on this sweater so I should buy 2!"

November 10, 2009 at 5:52 AM


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