Are You Spending More Than You Thought? Here’s Why.

are-you-spending-more-than-you-thought-here-s-why

By Julia Lachica
Epoch Times Contributor


When you’re out shopping, you’d often plan to save as much as possible by walking into stores and restaurants with sales and promotions. At the end of the day, however, you might realise that you’ve spent more than you’d intended to.

It’s not exactly your fault, though. Corporations have multiple tricks up their sleeves to get you to spend more of your hard-earned cash. Here are some strategies companies have been using without us noticing.

Decoy Pricing

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Have you ever gone to a fast food restaurant wanting to buy a regular meal, but end up adding an extra dollar to ‘upsize’ it?

After all, it sounds like a bargain to add a dollar to ‘upgrade’ from a small drink and sides to a medium drink and sides. People will most likely order an upgraded meal, since it’s only a dollar more than the regular.

This is called a ‘decoy’ price, where companies introduce a cheaper price option to make the expensive option seem like a bargain. So, think about the decoy price the next time the cashier asks you whether you want to upgrade your purchase.

Dropping the Dollar Sign

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Many restaurants and cafes have dropped the dollar sign as an aesthetic choice. But it’s not only to please the eyes of the consumers; it’s meant for you to spend more.

According to research done by Cornell University, customers spend eight percent more at restaurants and cafes that have dropped the dollar sign in their menus. This is because anything that refers to dollars, in word or symbol, reminds people of the “pain of paying”.

Just because the menu says ‘10’ instead of ‘$10’ doesn’t make it any cheaper. It’s an illusion and an effective one, we might add.

‘.95’ Pricing

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Most companies love ending the prices of their items with ‘.95’. The price ‘$4.95’ is relatively cheaper compared to ‘$5’, right? In reality, however, it doesn’t really make a difference.

Researchers call this the “left-digit effect in price cognition”. They explain that, because we read from left to right, the first digit in the price is what captures most of our attention. Our unconscious mind perceives $4.95 closer to $4 than $5.

Items that have prices ending with ‘.95’ also give us the idea that they are on sale. For example, when you enter a clothing store, most of the prices you see might end with ‘.95’. This makes us feel that the items in the store had their prices slashed from a higher price.

‘While Stocks Last’

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We have all been to a grocery store, but there always seems to be a per-customer limitation for some items.

‘3 for $3, while stocks last’ – it’s common to see these kinds of promotions. People would most likely buy two sets of such items because they think there is a demand for them.

This ‘scarcity effect’ tricks people into buying more of the item to avoid missing out. ‘While Stocks Last’ creates a hype that feeds the demand of these items.

Free Vouchers

Do you often receive flyers in your mailbox or outside an MRT station near a mall? You would most probably receive a deal for FREE vouchers.

Research shows that recipients of vouchers have a 38% rise in oxytocin levels, making them happier, therefore they are motivated to spend more.

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Using Many adjectives

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Nowadays, restaurants describe their food in detail rather than simply listing it in the menu. Think ‘Steak with Salad’ versus ‘Premium cut steak grilled to perfection paired with fresh vegetables dressed in homemade vinaigrette’.

Restaurants aren’t just writing these descriptions to make the food sound extra fancy or to tell you what you’d be eating; it also helps make the sale. Descriptive menus can increase sales by up to 27 percent compared to those with no description, according to research.

So, the next time you feel your appetite whetted by florid menu descriptions and start to order more, you’re not alone!

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