How Clearance Sales Trick You Into Spending
January tends to be a month where consumers get lured into last-minute sales and grand finale sales, spending money that they wish they hadn’t. Let’s take a look at some of psychology behind these “irresistible bargains.” What makes you vulnerable and how can you make better decisions when faced with sales and clearance offers?
Fear of Missing Out
Many clearance sales tap into our fear of missing out, meaning that in being afraid to miss out on a great opportunity, we spend money when we normally wouldn’t. The solution to this? Make a physical list that you can refer to of things that you actually need to buy. If something on the list goes on sale or drops in price, then you may actually be getting a deal since you were going to buy the item anyway.
Oddly enough we rely on the price charged for merchandise to understand its 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 and style. 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.
So when you see a clearance price, the trick is to imagine that price as the original price. If you’re still just as excited, then you could be getting a deal. If not, then you’ve most likely been swayed into thinking it was a deal because of the difference between the clearance price and the retail value.
Focus Is on “Saving,” Not “Spending”
Sales try to make us focus on how much we’re saving as opposed to what we’re spending. For example, when you see a sign over a pair of jeans that says 75% off, you might automatically think you’re getting a great deal. But those jeans may have been overpriced to begin with, and the “sale” price might not be the lowest price you can find.
Read more over at Psychology Today’s Why Clearance Sales are Psychologically “Irresistible.”