10 Spending Secrets Retailers DON’T Want You to Know
Dear Rich Lifer,
A grocery store near my house regularly displays “4 for $4” signs next to a particular brand of canned beans.
What’s funny is the store sells the same product a few aisles down for 99 cents.
How many people do you think are buying 4 cans of beans instead of 1 or 2 to get this “deal”?
Tactics like this are common in the grocery business because product margins are slim.
Stores will try to squeeze every penny out of you once you walk through the door.
But it’s not just grocery chains that do this.
Whether you shop online or in a brick-and-mortar department store, retailers are finding new ways to pry open your wallet.
Here are 10 secrets retailers won’t tell you because if they did it would cost them money.
Secret #1 – Comma-Less Price Tags
Consumer behavior research finds that when you remove commas from large price tags, shoppers perceive the price as being less expensive.
For example, a TV priced at $2999 is perceived as less expensive than a TV priced at $2,999.
Huh? The only difference is $2,999 sounds longer when you say it in your head:
Two-thou-sand-nine-hun-dred-and-nine-ty-nine (10 syllables)
Twen-ty-nine-nine-ty-nine (6 syllables).
To override this impulse, make it a habit of calculating the final price (with commas) after tax. Pull out your phone and add the tax. Look at that number, commas included, and you’ll see the real damage.
Secret #2 – Strategically Placed Expensive Items
Imagine you’re out shopping and you find a new spring jacket you like. The only problem is the jacket costs $350.
You put it back on the rack, but notice another jacket that’s equally as nice beside it and only $100.
Retailers do this to make the less expensive jacket look like a steal. Another term for this is price anchoring.
To avoid this trap, ask yourself what you’d normally pay for a jacket or item like this. If $100 seems reasonable, be skeptical. Think about what items you just saw and how much they cost relative to the $100.
Secret #3 – Fast-Talking Sales Staff
Like our last example, a common practice retailers will try is price anchoring. Another way to take advantage of this is by having trained sales staff lead you toward an upgrade.
For example, you walk into a store to buy speakers. You say to yourself, “I’m not spending more than $300.”
After talking to the salesman on the floor, you come to the conclusion that the $500 speakers he showed you are in fact a better value than the speakers marked for $1,000 – notice the comma.
Most people don’t realize this but they’ve just been talked into an upgrade.
To avoid this, take the lead in sales conversations. When you start leading by asking questions, the salesman is now on his heels trying to regain position.
Secret #4 – Rude Staff
This might sound odd but rude or snobby sales staff can sometimes make you spend more.
Have you ever walked into a high-end retailer and felt like the staff were ignoring you?
A study out of Canada revealed that shoppers looking at high-end items might actually be more likely to buy when staff play hard to get.
Marketing Professor Darren Dahl found that rude or “snobby” salespeople made shoppers want to share their exclusivity by buying luxury goods.
Secret #5 – Color Games
Retail marketers know that good in-store displays engage all five senses. And your sight is probably the easiest to hijack.
When you see a sales sign that’s red it wasn’t by accident. The color red is typically associated with a sense of urgency – buy now!
The color blue is associated with more reasonable prices. Where you typically find blue signs are beside “New Arrivals.”
This lulls you into thinking you can afford what’s new, when really if you just waited a few weeks the new arrivals would be marked down.
Black signs make you think of luxury. Although you won’t make quick decisions choosing items with black signs, the perception that the item is luxurious will build in your mind and help you justify paying the expensive price tag later on.
Secret #6 – They Want You to Touch
Stores would prefer that you make a mess. Touching product is a key component of making the move from contemplation to purchase.
Research out of Colorado finds that consumers need to touch items to connect with a brand. This is also why so many clothing stores display shirts and sweaters on flat tables. It makes it easier for you to set stuff down so you have two hands to touch the clothes.
Secret #7 – A Lack of Dollar Signs
Research shows that menus without dollar signs (Hamburger, 12) get you to spend more than menus with prices that include dollar signs (Hamburger, $12) or menus with the prices written out in words (Hamburger, Twelve Dollars).
Seeing the dollar sign sets off alarm bells in your mind that this is going to cost you money. Whereas, prices without dollar signs seem to fly under the radar.
Next time you see a menu without dollar signs, remember this trick.
Secret #8 – Carnival Mirrors
Believe it or not, some retailers use mirrors that distort your appearance, making you look longer and thinner.
If you think I’m kidding, think about fitting room lighting. Most fitting rooms use dim lighting to make you look tanner and thus more defined.
The same effect happens in the bedroom when you dim the lights. To avoid these tricks, shop with a friend or step outside the fitting room into brighter light.
Secret #9 – Price-Match Policies
It used to be that only a few select retailers would honor price-match guarantees. However, today price matching is more common than not.
When in doubt, Google whether a store has price matching, but it’s fair to assume they do. Amazon automatically price matches all other .com retailers selling the same item. So the price you see on Amazon is typically the lowest price for that item.
One other thing, if you want to negotiate, try using this “magic” question:
“Under what circumstances could I secure a discount for this item?” This one powerful question has saved me a lot of money.
Why it works: It’s open-ended and can’t be dismissed with a yes or no, and it’s a hypothetical which comes off less assuming.
Secret #10 – Lack of Cashiers
Does it seem like your local supermarket never has enough lanes open? This might be on purpose.
Stores limit the number of cashiers to create longer lines. The reason for this is so you spend more time alongside impulse buys like magazines, gum, and gift cards.
If you have the option of self-checkout, take it! You’ll lower the chance of spending money you wouldn’t otherwise spend.
To a richer life,