Pre-Christmas lesson: personalised Austerity guidelines

The currency (USD) isn’t particularly significant – no fiscal pun intended – but what is important and worthy of a timely, seasonal, reminder in “times of Austerity” is: don’t to be fooled by the various ploys…unless, of course, you have more money than sense! In which case I can tell you little of any great relevance in this item anyway.

sale christmas

Image by Leonard Chien via Flickr

We’ll start with the "that’s not all" technique. Discount coupons are offered that seem to reduce prices to such a ridiculous degree that the price of an item seems too good to pass up. Consider the hypothetical case of a "keepsake" holiday ornament that cost the retailer $10.00. The retailer’s desired profit is $2.00. The original price on the sales tag is $20.00 with no markdown included. While you’re studying the sales tag, the salesperson comes over and announces that today there is a special offer of a 20% discount ($4.00). Sounds good to you, but it’s still more than you want to pay. The salesperson now offers you an extra 10% off the 20% (because you’re wearing red), bringing the price down to $14.40. Deal! The retailer has made more than the desired profit and you feel great because you "saved" $5.60.


Now let’s look next at the "not-so-free-sample." This occurs when a salesperson, for example, at a cosmetics counter, gives you a little bottle of cologne or a complementary makeup application. Perhaps at the grocery store you are offered a little piece of cheese or fruit. No obligation to buy! Despite the fact that you have no need for any more Chanel No. 5, night cream, or fancy cheese, you feel an overwhelming urge to buy it anyway. Later, you examine your purchase and wonder what on earth you were thinking. This was the last thing you wanted or needed. But there’s also a chance that eventually you will become wedded to the product and become loyal to the brand. … Why does this work? You’ve been given something, seemingly for nothing, and now you feel obligated to reciprocate by buying the item.


In the "foot-in-the-door" technique you buy someone a gift-perhaps the perfect hat-the one that will make your mother, girlfriend, husband, etc. supremely happy. … In one of the studies demonstrating this technique, researchers went house to house, asking homeowners if they would fill out a brief survey. Most people agreed. Then the researchers came back and asked if they could go through every cabinet in the kitchen to see what products were being used, a process that took 2 hours. Having said yes to the small favour, the householders were more likely to agree to the large one.


Similar to foot-in-the-door is "low balling." You are told that an item is a certain price and you agree to buy it at that price, supposedly vastly below retail. Before you plunk down your hard or plastic cash, the salesperson announces that there was an error. The price is actually slightly higher or the deal that was promised won’t be approved by the manager. Now what are you supposed to do? You said you wanted the item. Now it’s going to cost you a few dollars more. … In a study demonstrating low-balling, researchers asked potential participants to be in a study to help a student in need of volunteers. After they agreed to be in the study, the researchers then informed the potential participants that the study would take place at 7 am (a notoriously early time for college students). If they now declined to participate they would look like they didn’t’ really want to help.


Are you seeing yourself in any of these scenarios yet? If not, hold on- there’s one more. In what’s called the "door-in-the-face," you tell a salesperson that you want to buy a videogame for someone in your family. The salesperson takes you over to the display case and excitedly tells you about the latest and greatest to hit the stores, such as Call of Duty Black Ops. It also happens to be well over what you thought it would cost when you made the decision to buy the game. Then the salesperson shows you another game that’s considerably cheaper but still more than you planned to spend. Now that you said no to the first item, you are more likely to say yes to the second which, in comparison, seems cheap. In the original research on the door-in-the-face technique, students were asked to volunteer all day to help a local agency (the "door"). Most people said no, but they were more likely to agree to help for a few hours than if they hadn’t been asked to volunteer for the whole day.

Read the rest at Psychology Today

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