What, does that sound impractical? If so, consider at least reading these two stories filled with insights that’ll help you make smart purchases—and help you avoid ones you’ll regret so much you’ll have to talk them over with your shrink.
In A Psychologist’s Guide to Holiday Shopping, UMass professor of psychology Susan Krauss Whitbourne gives the rundown on all-too-common retail tactics that manipulate shoppers into overspending. The techniques include stores offering seemingly big discounts on list prices that are inflated mostly to make the markdowns seem more substantial. Whitbourne calls this the “that’s not all” technique, in which store employees reveal discount after discount—and even so, so long as the consumer bites, the store still makes a nice profit. I’ve also heard this concept of discounting an intentionally inflated price called anchoring. What’s important is that consumers realize we live in a time when the “original listed price” is meaningless, and when it’s unnecessary to pay full price for pretty much anything, anytime, anywhere.
The freebie is another retail technique likely to make shoppers buy. Specifically, Whitbourne brings up free samples: When shoppers are given a sample of cheese, perfume, or whatever, they’re not only more likely to buy the product, researchers say that there’s a decent chance these shoppers will even turn into loyal customers who buy the product religiously down the line. Whitbourne explains that this happens because consumers feel like they somehow need to pay back the “generosity” (which is really Sales & Marketing 101) they’ve been the beneficiary of:
Why does this work? You’ve been given something, seemingly for nothing, and now you feel obligated to reciprocate by buying the item.
To defend oneself from the onslaught of shopping pressures, Whitbourne lists several tips, including:
Avoid feeling obligated to the salesperson. A good salesperson is able to relate well to people. He or she will engage in a variety of behaviors to make you feel “close.” Now some salespeople really might like you, especially if you have a long-term relationship as a customer. Even total strangers may take a shine to you. But remember that this is a business situation, not a true friendship, and you’ll find it easier to say “no” even after getting the proverbial free sample.
An LA Times story also tackles the psychology of shopping and spending, listing no fewer than 10 ways shoppers are regularly enticed into spending foolishly. Again, the power of freebies is discussed—getting something free encourages remarkably irrational consumer decisions—along with the idea, which researchers have demonstrated to be true, that shoppers will pay more for items that they’ve touch. Why? Joan Peck, a University of Wisconsin-Madison professor, explains that once they’ve touched a product, the consumer knows how much it weighs and just might like how it feels. Also, once the consumer holds the item in hand, he’s reluctant to give it back:
More surprisingly, Peck says, apart from any information or pleasure it gives you, simply touching an object can make you feel a certain sense of ownership. “And you’ll pay more for anything you feel like you own.”
Consumers are odd creatures: One measly touch and we turn into toddlers, going all “Mine! Mine! MINE!” A golden rule of shopping, then, is if you’re really not interested in a product, hands off.
Shoppers might also spend foolishly simply because they’re overwhelmed, with too many people to buy gifts for and too many options to pick from. So what do you do? Exhausted and clueless, shoppers often just defer to whatever they see anyone else is buying. Dan Ariely, another psychology professor (at Duke) and the author of Predictably Irrational, refers to this as “herding”:
As Ariely says, “Herding happens when we assume other people know something we don’t.” You may not end up with super-personalized gifts this way, but you’ll save yourself some effort at a time when you’re starting to flag.
You’ll also end up wasting money. That should make you feel like part of the herd as well.