Have you ever found yourself falling for the pricing tactics used by retailers and restaurants? It’s no secret that businesses use various strategies to make us feel like we’re getting a good deal, even when we’re not.
Shopping can be a fun experience, but it can also be tricky when it comes to pricing. Retailers and restaurateurs use a variety of tactics to influence our perception of prices, from using “charm prices” to per-customer limits.
These tactics often involve playing with our psychology to make us perceive the price in a certain way. Here are some of the most common pricing tricks used by retailers and how to overcome them to become a smarter shopper.
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Prices Ending in 9, 99 or 95
Retailers have been using this pricing trick for decades, and for a good reason: it works. Prices ending in 9, 99, or 95 make items appear cheaper than they really are. This is because our brains tend to focus on the first number in a price, and the lower that number is, the more attractive the price seems.
For example, a product priced at $9.99 seems more appealing than the same product priced at $10.00, even though the difference is only one cent. This pricing tactic is effective on everything from small items like a $1.29 iTunes download to big-ticket items like cars and houses.
2. Dollars Without Cents
If you see prices with no change, such as $20 instead of $19.99, the retailer is sending the message that you’re in a high-end place. This implies that you should go somewhere else if you’re concerned about pocket change. This tactic works particularly well in upscale stores or restaurants with high prices.
3. Prices Without Dollar Signs
Have you ever noticed that some menus only display prices as numbers without dollar signs? According to a Cornell study, this pricing tactic can make customers spend more.
Customers given a menu with only numbers spent significantly more than those who received a menu with either price showing dollar signs or prices written out in words. This same tactic translates to retail stores, where items are marked without the dollar sign.
Retailers hope that customers won’t associate the amount with money and, therefore, be less likely to keep a running tally of how much they’re spending as they shop.
Retailers and restaurateurs use a variety of tactics to influence our perception of prices, from using "charm prices" to per-customer limits.
4. 10 for $10 Trick
Have you ever seen deals like “10 for $10” and felt the urge to buy in bulk? Retailers push these deals to get shoppers to buy more items, even if they don’t need them. However, in many cases, you could just as easily buy one item for $1. It’s worth asking your retailer about it before loading up your cart.
5. Per-Customer Limits
Stores often add limits to products, like “limit 4 per customer,” to trick shoppers into thinking the product is scarce, the price low, or both. It also gives the impression of high demand. This makes shoppers buy more than they would usually buy to avoid missing out.
6. “Free” Promotion
Retailers know that “free” is the magic word that can persuade us to buy things we wouldn’t normally purchase. They often roll out deals like buy-one-get-one-free, sometimes persuading us to buy things we don’t need. Free shipping incentives that require us to spend a certain amount of money also draw us in.
7. Simple Prices
Simple prices, especially on products susceptible to future markdowns, allow shoppers to compare how much they’re saving quickly. It’s easy to compute the discount on a product originally priced at $50 that now costs $35, as opposed to an item originally priced at $49.97, now on sale for $34.97.
Ultimately, it’s important to remember that not all deals are created equal. While it may be tempting to buy in bulk or take advantage of a “10 for $10” promotion, it’s important to consider whether you need the items and whether buying in bulk will save you money in the long run.
Similarly, when it comes to promotions like “buy-one-get-one-free,” it’s important to consider whether the item is something you would have purchased anyway or if you’re simply being drawn in by the idea of getting something for free.
At the end of the day, the best way to avoid falling prey to these pricing tricks is to be a savvy and informed consumer. Do your research, compare prices, and consider your needs and budget before purchasing. By doing so, you can ensure that you’re getting the best value for your money and making purchasing decisions that align with your personal values and priorities.