The 3 sneakiest ways companies trick you into overpaying — and how to outwit them and save money

The 3 sneakiest ways companies trick you into overpaying — and how to outwit them and save money
Spotting their tricks will help you stick to your budget. Lobur Alexey Ivanovich/Shutterstock.com
Spotting their tricks will help you stick to your budget. Lobur Alexey Ivanovich/Shutterstock.com

You had a firm intention to only buy a smartphone charger, but somehow left the store with dog bones, toilet paper, green eyeliner and a new shirt (that you hate when you get home). Your simple purchase turned into $115 what the hell happened between the time you started shopping and the moment you hit check out?

Did you really need all that extra stuff or is something else at work that is tricking you into overspending?

Retailers know the lure of instant gratification and not being able to resist a deal can prompt shoppers to overspend. “The impact of this behavior is widespread, and, according to one survey, nearly all shoppers report buying items that are not on their shopping lists,” according to a 2017 report by the Consumer Financial Protection Bureau.

To fight back, you’ll need to resist retailer “kryptonite” when shopping, because even a well-intended shopping list can fall apart when confronted with a two-for-one deal. “Psychological games are at work when you shop,” Greg McBride, chief financial analyst at Bankrate, said in a phone interview. “And the appearance of a sale or getting two for a set price can be alluring.”

To beat retailers at their own game, you need to be able to spot their tricks. Here are three ways retailers try to suck you into overspending and how to outsmart them:

1. Using your online habits to target you with ads for similar items

Isn’t it fun to check out your friend’s newest purchase on Instagram or do a little side research on products you see advertised on Facebook or Pinterest? While browsing for your dream kitchen or handbag online is an efficient way to do research (and indulge in gorgeous visuals), it also leaves a digital wake, which is scooped up by retailers and companies to use for marketing.

How does this happen? Your browsing history and trends are tracked with website cookies, which allow marketers to target their advertising approach. That means if you checked out a sweater at one online retailer, you could be presented with something similar from other retailers on an ongoing basis.

Also, providing your email to a retailer opens the door to getting deals emailed to you that appear to be exclusive, making you think you could be getting in on something special.

2. Tricking you into thinking you’re getting a really good deal (when you’re not)

Customers like to feel as though they are getting an amazing deal on high-end products, which is one of the many reasons why you can’t leave a store like Target without dropping a decent amount of coin. Unlike Walmart, Target provides an environment of a higher-end shopping experience. “Walmart’s [philosophy] is ‘stack it high and let it fly’— that’s what places like H&M, Uniqlo are all about,” Joe Hancock, fashion merchandising professor and former employee at Target corporate, told Philadelphia magazine.

“Target likes to borrow strategies of higher-end retailers like Nordstrom,” Hancock said. “You don’t see 50 T-shirts in Target stacked; it’s only a few in every size. It creates the notion that it’s a specialty item, giving you the impulse ... to buy it because it makes you think that it’s more special than it really is.”

Also, creating a sense of urgency that the deal was so good the store had to limit the amount the consumer could purchase inspires people to spend more. Adding phrases like “maximum eight cans per customer” to an ad for a can of soup pushed sales higher, researcher Martin Lindstrom told Money, because even if no actual discount was offered, it gave the illusion the customer was getting an amazing deal.

Related tricks include offering you $10 off your next purchase if you spend $50 now or even giving you $50 off your next $100 purchase when you normally only spend about $20 per visit. (The trick here is to get you to spend more than you normally would in order to bag a discount.)

“Track your prices too,” McBride said. “One trick retailers use is raising a price and then a week later, putting it ‘on sale’ for what the former price was.”

3. Using the store layout and ambience to get you to buy more

Ah, product placement... the oldest trick in the book, but one that continues to work well for many retailers. Grocers love to use store design to their advantage, Money Crashers reported, by creating an environment that gets the shopper “in the mood” to shop, but also spend a little extra even as they check out.

Product placement and store layout are not limited to grocers, but nearly every retailer uses a layout strategy to get you to overspend. In fact, have you gone to your favorite retailer to pick up a single item, only to find out the entire store layout changed? That’s a technique to get you to spend more time at the store. “By changing up the layout, they get you to spend more time in the store looking for the item you need,” John Schmoll, founder of Frugal Rules, told CBS News. “The more time you spend in the store provides more opportunity to buy.”

Beyond layout, retailers use other subliminal tactics such as piping in an inviting aroma like lavender or playing slower-tempo popular music, the Huffington Post reported. Shoppers who made an unplanned purchase spent an average of $33 more when the slower tempo music was playing versus no overhead music, according to a 2005 study.

How you can resist overspending

Knowing what retailers are trying to pull will make you more aware of what they are doing and help you to avoid their tricks.

The most foolproof way to avoid giving in to impulse buys is to always shop with a list. Another trick is to pay with cash (so you can’t spend more than you brought with you).

Of course you can also return items you bought that you regret. But you may find it easier just to keep the item you feel meh about than to trudge back to the store to return it or mail it back to the online retailer. (In fact, an easy return policy is among the other tricks retailers use to get you to overspend in the first place.)

For more tips on how to avoid overspending, check out Mic’s guide to coupon and deal sites, plus 10 other great money saving ideas.

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