Why Shoppers Just Can’t Resist Clearance Sales

It's prime time for consumers to buy things they shouldn't, even at 75% off.

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January is prime time for shoppers stalking “further reductions” on merchandise that didn’t sell for Christmas or during the post-Christmas and post-New Year’s sales. In other words, it’s prime time for consumers to buy things they shouldn’t, even at 75% off.

For some shoppers, clearance racks are like catnip. The impressive differences between the “original prices” and the dramatically marked-down rates draw them in, leaving the impression that these deals are just too good to pass up. Yet the truth is that a “deal” isn’t a deal when you buy things you don’t end up using, and you spend money you wished you hadn’t.

What’s more, in my research, I’ve found that sale-obsessed shoppers ultimately spend more money than non-sale shoppers. Consumers fixated on deals and discounts often purchase things that aren’t truly satisfying—and because they aren’t satisfied, they continue to shop. Additionally, the rush these consumers get from snagging what seems to be a bargain (85% Off!) has an addictive quality. The products they purchase, bring home, and live with are in some ways secondary.

Why do we bite? Clearance merchandise isn’t called “an irresistible bargain” for nothing. Giant reductions and the way they’re presented in stores and on retailer websites tap into some primal psychological impulses.

(MORE: 10 Big Retail Trends from the 2012 Holiday Shopping Season)

Here are five insights as to why sales featuring major markdowns are extra tempting, along with some tips for making better decisions about what to buy this month, or any month, really.

1. Fear of Missing Out
January sales are typically of the “clearance” variety. We understand this to mean that when something is sold, our opportunity to buy is gone for good. The concept inspires a fear of “missing out” that shoppers often don’t consciously notice, which only enhances the power of their emotional reaction. You may not understand why you’re compelled to jump on that sweater discounted by 80%. You may not even realize that you actually didn’t like it before the price was reduced. Yet the feeling of missing out on what seems like a terrific deal can be overwhelming.

The urge to snatch up a bargain before it’s gone is especially potent with online shopping, when you can see merchandise selling out before your eyes and can’t see who else might be considering the “prize.” In stores, you can at least physically hold the item while considering its true value. The solution is to make a list of genuinely coveted items—and then only buy what you’re sure you wanted before it went on sale.

2. Competition
Shopping is often described as a competitive sport. And with items that are discounted and in short supply, the fear of “missing out” is heightened by the knowledge that you’re competing with others.

For some consumers, “winning” by way of beating others to get that last item on clearance is the goal, regardless of what the item is. One shopper I spoke to name Susie happily showed off multiple purchases she’d made during a crowded clearance event at Victoria’s Secret. Susie described with glee how she’d been able to snag merchandise she was sure others had wanted. What’s less clear was if Susie herself truly wanted the merchandise at hand.

(MORE: The Power of Crowds: This Is Your Brain on Black Friday Shopping)

A crowd of shoppers heightens emotions and amps up our competitive instincts. The chaotic atmosphere reduces our ability to think carefully about the true value of what we’re buying. As for a solution, here’s a simple one: Take a breather. Walk away, think, and use a few calm moments to level off the excitement. It’ll decrease the chance of bringing home an unsatisfying purchase.

3. Assumed Value
Most people don’t understand why one pair of shoes is $80 and another $400. So we rely on the price as a measure of quality, style, and worth. That explains why those $400 shoes that are now $150 seem like a much better purchase than an $80 full-priced pair that we might use more often. I’ve seen countless dusty boxes of dramatically reduced shoes (and all sorts of other products) in consumers’ homes. The cure is to imagine the sale price as the initial, unreduced price. Then, ask yourself if you’re excited by the item—and the price—right in front of you.

4. Are You Saving or Spending?
Sales and store receipts are constantly pointing out how much consumers are “saving” by making certain purchases. Quite obviously, though, when consumers buy stuff, they’re spending—and that’s the opposite of saving.

Store signs and retailer marketing efforts shift our focus toward what we’re saving rather than what we’re spending. The strategy often works. After a January shopping binge last year, a consumer named Tanya told me she was shocked when her bloated credit card bill arrived. “I couldn’t believe it,” she said. “Everything was way reduced and I saved so much money on what I bought.”

The quickest fix to remind oneself that money is being spent (not saved) during sales frenzies is to pay with cash. Credit cards are a buffer, where the emphasis is placed on what you’re getting rather than what you’re giving when you shop. Gift cards are even worse. They can seem like “free money” rather than real dollars.

(MORE: Epic Retail Fail: Where Did the Target + Neiman Marcus Collection Go Wrong?)

5. Time Investment
Monitoring sales is a time-consuming process. It’s often an emotional investment too. Many shoppers feel pressure to make good on that investment by not leaving a store empty-handed when a sale pops up. Finding something—anything—to buy can feel like winning a scavenger hunt.

Again, perspective is the key to avoiding purchases you’ll come to regret. Pause, and ask yourself if you really want the item, or if you’re simply caught up in the moment. Coming home with nothing is better than coming home with useless clutter.

Kit Yarrow chairs the psychology department of Golden Gate University and was named as the university’s 2012 Outstanding Scholar for her research in consumer behavior. She is co-author of Gen BuY and is a frequent speaker on topics related to consumer psychology and Generation Y.

2 comments
NormanDetweiler
NormanDetweiler

"often purchase things that aren’t truly satisfying"  I exist to buy goods. My life is not complete without consuption. And we wonder why people are going postal.