Saturday, January 19, 2008

Stores Trick to customers into spending more

I have read this an interesting topic in yahoo finance when I was doing my readings and was thinking of discussing it in here too.
I'm sure all of us wants to buy something when it has a discounts right! coz that's the way I am also. I am willing to spend more and buy more when it is on sale cause I feel I'll have a good deal. But there are some bad tricks that retailers try to come you into their stores with low prices.
Like double discounts ..i quoted below..

Retailers know that most people aren't good at math, and they take
advantage of this. More and more are using double discounts to earn more
money while making customers think they are getting a better deal than they
actually are.
For example, if we are given a choice of buying a $100 item at 45% off, or buying the same item at 20% with 30% additional taken off at the register, which would you choose? Most of us simply add the 20% and 30% and assume that they are getting 50% off the item.

When we do the math, however, it doesn't work out that way.Taking 45% off of 100% means the item sells for 55$. But if 20% off of 100% is 80$,taking 30% off that 80$ leaves us with an additional $24 discount, for a price of $56, or a dollar more.
That's why it is best to do the math before buying the item.

Another one.

Pricing items at $9.99 vs $10.

Studies have found that when prices end in 9, consumers end up spending
more money. While this might seem strange, there are various theories as to why
this happens. Most note that when people process information, the first number
they read has a stronger impression than the following numbers. So $9.99 seems
much lower than $10.

So instead of looking the first number, makes an effort to round off everything up when calculating, like for $9.99 by looking the number it seems like it much lower that $10 but its not.

For Three for $9.99.

Stores like to offer multiple items for a single price such as three for
$9.99. Most people assume that they need to purchase three of the items to get
the special price so people will buy more than they really need.
The truth is that unless the items are marked at higher individual prices
or the label says something like "must purchase quantity stated to get
discount," you can buy a single item for $3.33.

For buy one, get one free:
This is another promotion that can mislead you into thinking you're getting a
good deal. It's often difficult to tell whether you would pay half as much for
purchasing a single unit or, for that matter, whether the price of a single unit
has been inflated to take into account the extra item being "given away."
Buy one, get one free offers are not better than the regular price of purchasing two items. and if you are good on remembering numbers and prices, it is better to find out what is the regular price of each item. But you know, even me, I can hardly remember the regular price of the certain item unless I keep the catalogs or the ads from the papers before the items were put on sale. And I always compare them if I really can save with their discounted prices as advertised.

Tips: Don't assume things on the end of an aisle or that are marked as "on sale" are actually a good price.

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