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The shady economics of ‘buy one, get one free’ deals

thehustle.co

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Re: The shady economics of ‘buy one, get one free’ deals

#111

Post by austincheney »

scraft wrote: post #93

Buying the right BOGOF items saves money. For instance, after spending a lot of time trying different options, I now know exactly what face soap I want and I also know the price it sales for. From time to time, it'll be sold as a BOGOF, so providing the price makes sense (i.e. it is the normal price or less than 200% of the normal price) then it is a good buy (it has long shelf life, and will always be used). I use u…

> I have read several times that some of these approaches and typically favoured by those who have more disposable income, which isn't ideal, as we really want those with less income to be getting all the good savings to try to ease/stop the wealth gap.

The disposable nature of income is orthogonal to wealth. It is possible and common to be wealthy and still be broke. Consider the pro athletes earning 7-8 figure income that are still forced into bankruptcy. It is also unrealistic to think people who are weak at saving money need a nanny to follow them around and police their spending habits in an effort to close the wealth gap.

The most straight forward means to close the wealth gap is to tax capital gains as regular income and incentive spending from the wealthy with a punishing estate tax.

Re: The shady economics of ‘buy one, get one free’ deals

#112

Post by nfriedly »

dazc wrote: post #106
jamiethompson wrote: post #95

Earlier quoted context omitted.

But if you did want to buy 3, or 6 or even 12 bottles then it is actually a saving. It's about shopping smart.

If you buy 12 there is often a case which is a lot cheaper. I don't drink that much that it makes sense to stockpile; I also have the problem that if I have a fridge full of beer I am going to drink a lot more than I would otherwise. I may be in a minority, but I prefer to buy a couple of beers just once in a while.

I buy a case at a time, but only put two or three at a time in my fridge ;)

Re: The shady economics of ‘buy one, get one free’ deals

#113

Post by vxNsr »

One way to combat this mentally is to have set prices for things in your head... ie the price you feel each commodity should cost. Don't buy things that deviate to far from that price.

For example I feel a nice non-iron, fitted, button down shirt shouldn't cost more than $20, so I only buy when I see them at, or around that price, BOGO or not (and I need one/two). Same goes for lightning cables, I'm not paying more than $5/(10ft)cable no matter what material it's wrapped in.

Re: The shady economics of ‘buy one, get one free’ deals

#114

Post by [deleted] »

Vinnl wrote: post #38

I tend to make a conscious effort to ignore "deals". As far as I know, the one case in which a deal is actually advantageous as a consumer is when that deal encourages consumers to buy more of a certain product at the same time, and the merchant passing part of the scale and predictability savings on to the consumer. For example, if you buy tooth paste every now and then anyway, buying it at the same time as many oth…

[deleted]

Re: The shady economics of ‘buy one, get one free’ deals

#115

Post by lowken10 »

chrisdone wrote: post #60

I 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…

Thank you captain obvious. People with money don't pay attention to deals. Wow!!! What insight.

Re: The shady economics of ‘buy one, get one free’ deals

#116

Post by flavor8 »

We're staying in Nashville overnight on our way somewhere else and enjoyed walking around on a weekend evening.

We noticed that all of the stores selling cowboy boots (and there are multiple) have a "buy one get two pairs free" offer. All boots in the store we checked out seem to be priced at $300+. So, instead of simply offering discount boots at ~$100, they're leading you to think you're getting $300-quality boots and $600 of "free" value in the extra pairs. Framed like that, who could possibly refuse?

Re: The shady economics of ‘buy one, get one free’ deals

#117

Post by kzzzznot »

ubercow13 wrote: post #103
dazc wrote: post #89

Earlier quoted context omitted.

A long running promotion in Tesco is 3 bottles of any brand beer for £5.25. I can't imagine anyone ever goes into a store with the intention of buying 3 bottles but if you just buy 2 you're misguided into thinking you'll lose out. In reality, you're spending more and drinking more than you really want to.

Ha, I have fallen for that exact trick at Tescos too many times

I fall for this every time I go into Tesco. I think the average beer in this deal is £1.89 so you are shaving off 42p by buying 3 which is around 7% per beer. Sounds alright but only if you wanted all three. I tend to buy the 3 and feel obliged to drink them all that evening when I only wanted 1 or 2.

Plus they're overpriced anyway

Re: The shady economics of ‘buy one, get one free’ deals

#118

Post by sokoloff »

austincheney wrote: post #111
scraft wrote: post #93

Buying the right BOGOF items saves money. For instance, after spending a lot of time trying different options, I now know exactly what face soap I want and I also know the price it sales for. From time to time, it'll be sold as a BOGOF, so providing the price makes sense (i.e. it is the normal price or less than 200% of the normal price) then it is a good buy (it has long shelf life, and will always be used). I use u…

> I have read several times that some of these approaches and typically favoured by those who have more disposable income, which isn't ideal, as we really want those with less income to be getting all the good savings to try to ease/stop the wealth gap. The disposable nature of income is orthogonal to wealth. It is possible and common to be wealthy and still be broke. Consider the pro athletes earning 7-8 figure inco…

A punishing estate tax probably does more to incent trust formation, life insurance sales, minority ownership transfer structures, and other such mechanisms to bypass the estate tax than it does incremental spending.

It's largely unprepared idiots that pay any substantial amount of estate tax.

Re: The shady economics of ‘buy one, get one free’ deals

#119

Post by 0x445442 »

hannob wrote: post #80
chrisdone wrote: post #60

I 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…

I don't have hard numbers to quote on this, but I'm very convinced that you end up paying more in the end. From my own experience and pretty much every one I talk about this, people have a tendency to buy things they'll never need. (I constantly try not to do that, but it takes active thinking about it all the time.) No discount deal is cheaper than the one where you don't buy something you don't need. Then there's u…

> but I'm very convinced that you end up paying more in the end

This is actually the same tact credit card companies use, even if the balances are paid off every month. That's why we still use budgeted cash from envelopes to pay for most things. The only payments we run through a card are fixed costs where the percentage paid back on the card exceeds the transaction fee if any.

Re: The shady economics of ‘buy one, get one free’ deals

#120

Post by danmaz74 »

dazc wrote: post #89
hannob wrote: post #80

Earlier quoted context omitted.

I don't have hard numbers to quote on this, but I'm very convinced that you end up paying more in the end. From my own experience and pretty much every one I talk about this, people have a tendency to buy things they'll never need. (I constantly try not to do that, but it takes active thinking about it all the time.) No discount deal is cheaper than the one where you don't buy something you don't need. Then there's u…

A long running promotion in Tesco is 3 bottles of any brand beer for £5.25. I can't imagine anyone ever goes into a store with the intention of buying 3 bottles but if you just buy 2 you're misguided into thinking you'll lose out. In reality, you're spending more and drinking more than you really want to.

Having recently moved to the UK, I have noticed some "offers" of this kind in supermarkets where there wasn't actually any advantage over buying the items by themselves. They really must count on people not checking.
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