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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

#121

Post by wil421 »

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 agree with you. Generally I shop at the same grocery store. When certain BOGO items go on sale I know to buy because I can ball park the usual price. BOGO chicken breast, pork tenderloin, certain tolitries, yogurt, and a few other things. I usually freeze BOGO meat but I can see how it can go bad and you lose money.

My wife and I usually recognize the good deals. We avoid buying stuff we don’t usually eat just because it’s on sale.

Certain things are terrible to buy BOGO especially at gift shops, firework stores, and generally any tourist area. Another commenter mentioned Nashville boots and I can attest it’s a rip off trying to make you spend more. Single items have inflated prices at these places.

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

#122

Post by afpx »

I’m very interested in knowing what proportion of retail revenue comes from these types of dark patterns. Is it even possible to come up with a number? If so, I’d be willing to help fund the research.

The other day a friend and I were discussing the “take X% off your entire order” coupons. These seem to be very common, lately. She mentioned that she recent used one on a cart of $100 in items. She expected a $20 discount. But, to her surprise, she only received $2 off. Apparently all but one of her items were ‘restricted’ items.

It seems like many companies find it easier to trick people than to actually provide great service or products.

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

#123

Post by danmaz74 »

everdrive wrote: post #79
tyfon wrote: post #66

Earlier quoted context omitted.

When my wife comes back from shopping I often jokingly ask her 'how much did you "save" today' and she laughs back. We're in a quite good position so it doesn't matter as much but it's often easy to get lost in the rebates and forget how much is actually spent.

I usually don't like language that suggests that consumers are brainwashed by marketing. But, getting people to comprehend that spending money =/= saving money is surprisingly difficult. Even when they understand money has been spent, it's not spent rationally: money "saved" at the grocery store doesn't actually mean less total money spent, rather the same amount as usual is spent, and more food than usual was able t…

If that additional volume makes your daily spending on food lower, then it's a saving. If it makes you eat more, or throw away more food, then yes, it's not a saving.

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

#124

Post by benj111 »

pattle wrote: post #29
rlue wrote: post #21

What 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…

Surely it depends on your buying habits, and how you buy. Now if you get stuck on the hedonistic treadmill and start buying the more expensive cereal all the time that is bad from a cost point of view, but if it's a one off treat replacing another £3.50 box of cereal, you've saved a pound.

I suppose we should rationally evaluate the benefit that the new cereal independently of the price. And then if the benefit outweighs the cost, then we should buy. But we aren't robots, and we like nice things.

Ps I often buy the wine that's on offer, it does depend on the supermarket though, as some just sell rubbish. It stops me having to look sagely at a half dozen bottles, that I have absolutely no basis to differentiate between, other than label.

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

#125

Post by whoopdedo »

0x445442 wrote: post #119
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…

> 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.

You're still paying for credit card transaction fees indirectly when you use cash. Since retailers are prohibited from charging discounts for cash purchases then to cover the card fees they raise the price for everyone. Cash buyers end up subsidizing card users.

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

#126

Post by NeedMoreTea »

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.

All that ever counts, regardless of "offer" or "saving" is the price per 100ml or kg. Thankfully the pesky EU interfered with the UK yet again and insisted that must always be displayed.

Haven't used Tesco delivery for years, but their "best offers" always brought back the 10p and 7% savings, the real savings were on different tabs or buried in search. There was a search by cheapest, never by price per unit. Funny that.

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

#127

Post by tgb »

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…

I consider myself reasonably frugal and thoughtful about money, but I definitely fell into one of these traps buying a suit for the first time. I went in with a specific sale in mind, they told me they had a two-for-one deal going so I might as well try on two colors of suits. But then it turned out the second suit was over double the price of the advertised sale price that I came in for (the first suit would have qualified) and two-for-one would of course be the more expensive of the two prices. But I had already picked it out, etc. and it was after all really just "half" the price since I was getting two suits and you know maybe I did need both colors. I have worn one of them once and the other never in the three or four years since then. Though it is nice to know I won't have to panic if there's a sudden funeral I have to attend, say.

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

#128

Post by whoopdedo »

A related and greater rip-off is the discount cards that give you coupons after a purchase. Consumers become addicted to these "deals" that make it seem as if they're paying a very small amount for something. When in fact they paid up-front with the original overpriced purchase. It amounts to an interest-free loan to the retailer that is paid back to you with those coupons.

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

#129

Post by NeedMoreTea »

underwater wrote: post #65
paganel wrote: post #39

Earlier quoted context omitted.

What I ended up doing in order to avoid this is that I’ve been buying from the same brands for some time now, i.e. the same soap, the same shampoo, the same butter (truth be told, for butter I fluctuate between two brands), the same chocolate, the same detergent etc. This way I don’t fall for tricks like the one you mentioned because I almost don’t care about any other brands and products than the ones I’m really int…

You're not exactly beating the system. That's just plain old brand loyalty, which companies love. You've stopped shopping based on quality or value, and they can turn a profit without investing anything into marketing.

Not really beating the system, more using it to our advantage. The half price offers in the UK big 4 come around often enough that paying full price, or even 3 for 2 is almost never needed on basics. We'd go to Tesco once in a while just for promotions, come out with 6 months worth, then do the regular shop at Aldi.

I remember reading that many of the costs of the in store offers and promotion are actually pushed to the supplier. Leaving Tesco, Asda etc on same margin as before. I suspect this hits smaller suppliers disproportionately.

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

#130

Post by skh »

danmaz74 wrote: post #123
everdrive wrote: post #79

Earlier quoted context omitted.

I usually don't like language that suggests that consumers are brainwashed by marketing. But, getting people to comprehend that spending money =/= saving money is surprisingly difficult. Even when they understand money has been spent, it's not spent rationally: money "saved" at the grocery store doesn't actually mean less total money spent, rather the same amount as usual is spent, and more food than usual was able t…

If that additional volume makes your daily spending on food lower, then it's a saving. If it makes you eat more, or throw away more food, then yes, it's not a saving.

That isn’t saving money it’s spending less money as I see it. If you took the surplus amount you would have spent and put that in a long term investment or savings account then I think you could claim a savings. Almost no one does this with day to day spending though so it’s best to view it as spending less. When you spend money you aren’t saving money. You are spending it. You might be spending less in a given situation than you would have if the circumstances were different but it isn’t a savings.
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