Up until 2009 in Norway, it was illegal to advertise products with unrelated additions ("tilgift"). Not strictly related, as here it's the same product. But this made it illegal to do promotions like "buy our car, get a free iPad", "buy this coke, get a chance to win prices". I think consumers wanted the law gone, as it looks like we missed out on deals other countries had. But it makes it harder to compare and tricks our brains.
The shady economics of ‘buy one, get one free’ deals
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Re: The shady economics of ‘buy one, get one free’ deals
#52> A coffee mug that usually sells for $10 + $3 S&H will go for $13, with FREE shipping. I actually prefer this. It's much better than shops that activity try to hide shipping costs until the last moment. Also it makes comparing prices quicker.
When comparing it also makes you realize how much Amazon Prime "free shipping" is a joke sometimes since they just roll the cost into the product.
"Why am I paying for prime?"
Re: The shady economics of ‘buy one, get one free’ deals
#53> Most online clothing brands offer ‘free’ shipping, with the catch that you have to meet a minimum purchase amount (often $100) to qualify. Some 58% of consumers will add additional items to their cart — often things they didn’t originally intend to purchase — just to “save” $5 to $10 on handling fees. You will find people vigorously defending their behaviour when challenged on this. For example: Amazon Prime. Amazo…
> and yet people will defend their spending saying that they are "saving" money
I've never seen Prime as a purely money-saving scheme. It possibly does save me a bit overall (but not every month, for sure) on the things I genuinely want next day, but I also get the convenience of weekend delivery which either isn't available or is very expensive without Prime (from Amazon or other options), or certain drop-site delivery locations that don't seem to be available & cost-less without Prime. There is also the utility value of not needing to think about delivery as much.
> designed to get you to spend money at Amazon.
That much is certainly true. But it doesn't have to cost you more that way than it would anyway.
> You just need to do the sums.
Shopping around can be time-consuming, especially as every other retailer is pulling similar tricks so you have to make an effort to see through their crack as well. Though I do sometimes double-check and find the Amazon price the same once delivery is accounted for in both cases. Sometimes there is a saving to be made. Sometimes that saving has a convenience cost.
> Another common defence we will see when people respond to this is "Oh I know it doesn't save me money, it's the convenience".
Is paying for convenience inherently wrong in your world view?
IMO, spending time and/or cognitive effort to save money has to be weighed against what-ever else you might be doing with that time/effort (going out for a run, playing with the cat, doing some work, just enjoying doing nothing really, ...) otherwise you are guilty of exactly the same sort of false economy.
Re: The shady economics of ‘buy one, get one free’ deals
#54The shady economics of a non-functioning close button of an annoying "Subscribe to newsletter" popup. Bottom line: it works but also sends a negative subliminal signal to the visitors that a given business is desperate. Just something for website owners to have in mind.
Re: The shady economics of ‘buy one, get one free’ deals
#55Does anyone know of a book (even better a textbook, if possible) detailing these strategies? This article is about the "BOGO" deal, I'm interested in reading about other kinds of these strategies, and why they work. If anyone has any recommendation, especially for more academic stuff (textbooks or papers), I would greatly appreciate it!
Not a textbook, but Freakonomics is in that ballpark. It's (un-) surprisingly hard to find academic information about this on Google because all the results are click bait articles about how to improve sales, rather than peer reviewed theory.
Thanks, I'll definitely look into Freakonomics. I agree it's pretty hard to find info on this topic from an academic perspective, and it's really unfortunate, as I believe it is important for the wider public to understand these tactics and why they work.
Re: The shady economics of ‘buy one, get one free’ deals
#56What makes this really interesting is how living in an economy where prices are both set by the seller and non-negotiable causes consumers to equate asking price with value. As a consequence, BOGO feels like a better deal than one item at 50% off MSRP. A 50% discount is a change in the asking price; the value of this item must have depreciated in some way for the seller to want to get rid of it (e.g., this garment is…
> This isn't even getting into the actual value of perceived value (cf. the sticker price of wine vs. its perceived quality). Really interesting stuff. I fall foul of this trick quite a lot when food shopping. For example if I'm buying a box of cereals and I see one is priced at £1.80 and another is priced at £2.50 but is on sale from £3.50 I'll buy the more expensive one because I'm under the illusion that I'm getti…
Thankfully in some European country food must be sold with a clear indication of the "real" cost per KG
Re: The shady economics of ‘buy one, get one free’ deals
#57Earlier quoted context omitted.
> This isn't even getting into the actual value of perceived value (cf. the sticker price of wine vs. its perceived quality). Really interesting stuff. I fall foul of this trick quite a lot when food shopping. For example if I'm buying a box of cereals and I see one is priced at £1.80 and another is priced at £2.50 but is on sale from £3.50 I'll buy the more expensive one because I'm under the illusion that I'm getti…
Thankfully in some European country food must be sold with a clear indication of the "real" cost per KG
Greece does this, and it's a lifesaver. No more ballparking the math, I buy the cheapest shampoo and toothpaste per liter very easily.
Re: The shady economics of ‘buy one, get one free’ deals
#58> A coffee mug that usually sells for $10 + $3 S&H will go for $13, with FREE shipping. I actually prefer this. It's much better than shops that activity try to hide shipping costs until the last moment. Also it makes comparing prices quicker.
When comparing it also makes you realize how much Amazon Prime "free shipping" is a joke sometimes since they just roll the cost into the product. "Why am I paying for prime?"
You are paying for it so you don't get charged for the shipping again. It's very, very shady.
Re: The shady economics of ‘buy one, get one free’ deals
#59Earlier quoted context omitted.
> This isn't even getting into the actual value of perceived value (cf. the sticker price of wine vs. its perceived quality). Really interesting stuff. I fall foul of this trick quite a lot when food shopping. For example if I'm buying a box of cereals and I see one is priced at £1.80 and another is priced at £2.50 but is on sale from £3.50 I'll buy the more expensive one because I'm under the illusion that I'm getti…
Thankfully in some European country food must be sold with a clear indication of the "real" cost per KG
Yeah, it's really convenient. I often compare the price per weight when choosing between two different but similar items.
I also remember a time when I needed a new dishwasher, and one shop had it from $300 for $200, while another shop just had the same dishwasher simply for $200. I got it from the second shop, of course.
Re: The shady economics of ‘buy one, get one free’ deals
#60I feel that there is a wealth/background effect here that could be studied somewhat too. I think people who don't have to worry about money are less likely to pay any attention to discounts and deals.
Having come from a council estate, there is a certain mindset behind getting a deal for everything, making your little money go as far as possible, buy one get one free, or discounts on anything, or coupons to get into restaurants or discounted vacations, or companies that "get you deals" on all your electric, gas, TV, internet bills, 8 packs of cheap beer, etc. are all seen as victories and you are crazy for not taking advantage of them. There's an emphasis on getting more quantity for less money. That's easily exploited.