Retailers know sales entice us to spend, and to that end stores play some magic tricks to present the illusion of a deal. For example, did you know that certain numbers used in pricing entice us to buy?
Don’t be duped! Watch out for these sneaky retail tricks.
Goldilocks Pricing
If you’ve shopped for electronics, like TVs lately, you’ve probably noticed three similar sets with three different prices: low, medium and high. It’s strategic and known as ‘Goldilocks Pricing,’ according to Mark Ellwood, author of the new book Bargain Fever
. And with this positioning, retailers know exactly which price we’ll fall for.
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“What the store is trying to make us do is gravitate to the one in the middle, because that’s probably where the margins are best. I guarantee you there’ll be very little feature difference between the cheapest and the middle one. So if in doubt, go for the bargain,” says Ellwood.
Anchor Pricing
Another tactic called ‘anchor pricing’ makes a regularly priced item seem like a better value when placed beside a much pricier piece in the same store.
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“Next time you walk into J. Crew look for one of the Collection pieces — it’s one of those $900 blouses. They’re hanging on the rack not to be sold but because they will make the $200 blouse next to it look a whole lot cheaper,” remarks Ellwood.
Ellwood suggests carrying the lower priced item into another department for a clearer perspective. Then ask yourself if you still think it’s worth the price.
Misleading Phrases
Next, studies show certain words trigger spending, and some retailers employ misleading phrases to increase sales. Words like “low price,” “great value” or “today’s special” can be used on a product that hasn’t actually been reduced in price. You may want to double check it’s truly a discount by simply asking a sales associate.
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Manipulative Pricing
Finally, we rely on price tags to tell us what something is worth, but this is another way retailers sometimes try to manipulate.
Ellwood says we associate prices ending in a ‘9’ with a good deal, while prices ending in a ‘0’ connote high-quality goods. And exact prices, such as $12.97 or $8.24 suggest an item has been priced as low as it can go. “Somehow we assume that that price that is so exact has been calculated or worked on and they’ve really given us the best possible deal,” he says. Of course, certain retailers have been known to use certain digits for final sale items. For example, as Consumerist reported, Radio Shack, Gap and many other major retailers tend to use the number 7, for example $8.97, for final markdowns. But don't always follow that assumption.
Have you caught any sneaky retail tricks? Connect with me on Twitter @Farnoosh and use the hashtag #FinFit.
Special thanks to Goldy + Mac for making this video possible.