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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

#81

Post by iamgopal »

maaaats wrote: post #68
pattle wrote: post #29

Earlier 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…

Even without discount on the more expensive one, it can be used as a marketing trick to make you buy more expensive. For instance offer three versions of a product: $1 branded as cheap/bad, $2 branded as good, $5 branded as luxury. The last one exists mainly to anchor the value of the $2 as also cheap and to make you buy it. If one only had the choice between $1 and $2, most people would choose $1 option.

I know purchase manager at large companies does that quite often. Get quote from three companies. Cancel out highest and lowest bidder and confirm order to middle one.

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

#82

Post by benbristow »

chippy wrote: post #32

> 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…

Amazon is just convenient though.

Other companies don't have stuff like the lockers which are really useful if you're working full-time and live alone.

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

#83

Post by jjeaff »

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…

I'm not sure I get what you mean. If I go to the store with a list of the usual items I purchased and some of those items are on sale, I end up spending less money for the exact same items.

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

#84

Post by nickjj »

kabacha wrote: post #76

I've been living in Thailand for a while now and the market is so unregulated and abused by these sorts of deals. A big super market near my house runs 2for1 buns every day for the past year. I've got desensitised to the point where I don't even see the "original price" anymore. The deal price is just the real and only price. The only real deals are the "almost expiring" price reductions super markets put out before…

Are regulations supposed to stop that behavior?

There's plenty of grocery stores in NY that continuously run the same "special" on the same items. I've seen the same hot dogs on sale for the same price for a year.

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

#85

Post by Proven »

Busybodies in action..

> But according to an industry insider, the goods we typically get in a BOGO deal are “low-demand, non-efficient, lacking in quality and/or close to the expiration date.”

I pity their readership if it takes an industry insider to explain the mystery of lower prices. Wow, lower demand usually translates into a lower price. And while I'm at it, vice versa (fight for $15, yeah!)

What particularly pisses me off that these geniuses assume they know better than I when a deal is reasonable and when it's shit. In other words, they're smarter than I.

And what follows from that fact is they ought to have the power to limit the seller's freedom of speech and my freedom to see and buy what I want. Thanks but no thanks.

I find the article very insulting.

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

#87

Post by dazc »

A friend once pointed out a deal on Coca Cola in one store where 2 bottles were actually cheaper than one single bottle. I reckoned the expensive single bottles were only there to convince you that you were getting a great deal?

Coca Cola is, I think, the classic example of a product where fair cost has become irrelevant.

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

#88

Post by nickjj »

benbristow wrote: post #82
chippy wrote: post #32

> 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…

Amazon is just convenient though. Other companies don't have stuff like the lockers which are really useful if you're working full-time and live alone.

It depends where you live.

Walmart can be convenient too. The prices are about the same as Amazon and depending on where you live you can have your product in hand in however long it takes to pick it up locally (~30 minutes or less let's say). Order it online, pick it up locally.

And if it's not available in the store right now, they ship it to their store for free in usually a day or 2. No membership required.

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

#89

Post by dazc »

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…

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.

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