Think You're Getting a Deal? 10 Tricks Sellers Use
After years of research, our friends at Consumers' Checkbook have learned how sellers get you to think you are getting a great deal, even if you're not.
During Consumers' Checkbook's 40-year history, its secret shoppers have obtained more than a million prices for everything from alternators to zucchini, from hundreds of types of retailers and service providers. All that research adds up to one key piece of advice: If you want a great deal on anything you buy, you have to shop around.
Price differences vary considerably from one company to the next. One reason for that is that companies know many customers don't bother to shop around — but not necessarily for the reasons you might think. Sure, it's a pain to scour the internet for the lowest price on a TV or collect five bids for a roofing job. More often, though, buyers don't compare prices because they've been convinced they're already getting a great deal.
Companies use an arsenal of marketing tricks to lead customers to believe they're scoring bargains, when they're actually spending more or paying right away without checking the competition. Here are 10 sneaky pricing and selling strategies to guard against. Be aware that some companies employ more than one.
1. Fake Sales
"SALE! 60% OFF!!"
Many retailers constantly advertise big savings. But these promotions usually aren't discounts at all.
After tracking prices of big-ticket items sold at 19 major retailers for 10 months, Consumers' Checkbook found that sale prices at 17 of the stores were bogus, with supposedly lower prices being offered more than half the time.
At some stores, the fake sales never end: For several chains, Checkbook found most items were offered at a false discount almost every week. In other words, the "regular price" shown on price tags is seldom — if ever — what customers actually pay.
These special-but-not-really-special discounts, holiday sales, and red-hot-spring/summer/whatever events are meant to manipulate you into buying items right away, while "on sale," lest you soon face higher prices. It dissuades you from shopping around. After all, if something is "60% off," what's the point of comparing prices elsewhere?
All this good-deal euphoria is also designed to make you snap up more stuff while you're at it.
2. Inflated Anchor Prices
On the flip side of fake sale pricing is fake "regular" pricing, referred to in the industry as "anchor prices." Most sellers now show prices that are crossed out with lower "sale" prices splashed nearby. Those crossed-out higher "list" prices are rarely if ever charged by the store or its competitors; they're gimmicks to make that day's prices seem like bargains.
3. Scarcity Warnings
Retailers often try to convince you to buy now or they won't have anything left to sell you. With the current supply chain backlog, this might actually be true, but usually, this is just a ruse to push you into buying.
Don't let warnings like these deter you from shopping around. Even if someone else buys that last discontinued sofa, salespeople are always happy to find something else to sell you.
4. Limited-Time Offers
Another selling technique is to claim a discount is available for only a short time. Want the lower price? Better get moving because it's only good on Black Friday or end-of-the-year clearance or Presidents' Day or Valentine's Day or Memorial Day or 4th of July weekend... But really, there's no rush because at most stores, the supposedly temporary "discounts" never end.
Deadlines show up in other high-pressure sales environments: Gyms offer to waive hundreds of dollars in initiation fees if you sign up that day or offer free upgrades that won't be around after you leave the room.
Salespeople know that if you walk out of the store, you probably won't return. By setting immediate deadlines, they hope you'll stop your pesky contemplation and buy already.
If a seller knows its customers will balk at paying a big price, it might split it into smaller, more acceptable slices. So, when QVC wants to sell you, well, just about anything, it offers it for "5 Easy Pays of $22!"
Lots of non-infomercial retailers also make their prices seem more manageable by offering smaller payments. Some travel sites let you make monthly payments for trips making it seem more affordable.
6. Special Treatment
"Because you've been a great customer..." "Because we have a crew working nearby..." "Because we have leftover materials..." "Because you're a parent or a senior..." "Because you belong to (insert club/group/association name here)..." Salespeople know if they can convince you that you're getting special treatment, you'll feel good about their offers — and might not shop around to find better prices or terms.
7. Clearance Sales
We often read advice that argues there's a best time of the year to buy something because sellers need to clear out old inventory — for example, wait until the end of summer to buy a new grill or lawnmower. Checkbook finds these claims are generally without merit. Often, secret shoppers find "clearance" items available for the same price from the same sellers months later.
8. Word Play
Marketing experts avoid adjectives near price displays that might conjure a feeling of high cost. So instead of using "Big savings" or "Highly rated" or "Great performer," they'll say "Sale" or "Best seller" or "As advertised."
9. Charm Prices
We all know that stores display prices ending in 99, 98, or 95 to make prices appear lower: $9.99 is perceived as "$9 and change," rather than $10. It's actually not the "99" or "95" at the end of the price that affects us. It's that shoppers pay most attention to the left-most numbers in a price; $199 seems a lot better than $200.
Also effective is pricing using seemingly random amounts — say "$328.46." This makes it look like prices were carefully set so they are as low as possible.
10. Easy Math
Some sellers, especially those with pricey products, advertise discounts as nice round dollar savings ("Save $100"), rather than as a percentage off. The idea is that you'll more easily absorb the supposed deal.
Similarly, some sellers group items for one price (4 for $10). You'll buy four of them, even if you can buy just one for $2.50. We all fall for this.
About Consumers' Checkbook
Puget Sound Consumers' Checkbook and Checkbook.org are a nonprofit organization with a mission to educate and help consumers. Checkbook also evaluates local service providers — home improvement contractors, doctors, dentists, veterinarians, stores and more. It is supported by consumers and takes no money from the companies it evaluates. BECU members can try Consumers' Checkbook for 30 days for free and can get 50% off their annual subscription.