At Seedly, we love to share ways to help you make smarter personal finance choices. Here in this article, we will be sharing with you 5 dirty pricing tactics that shops do with that we unknowingly (sometimes also willingly) fall for.
This article should make you more aware of such pricing tactics to prevent you from falling into their trap. These are actually psychological pricing tactics.
What is Psychological Pricing?
It is a tactic commonly used targeting consumers who react to prices with emotions than logically. Basically, using your heart to think instead of using your brain.
This aims to make you think that you are spending less than it really is.
1. “Useless” Pricing
Ever noticed the prices of medium-sized fries vs large-sized fries at McDonald’s?
|Size of Fries||Price of Fries (S$)|
Would anyone buy the medium-sized fries? Definitely not, especially if you are only getting fries!
This happens very often in bundle deals at IT fairs, where they show you the price of a laptop on its own, and the price of the laptop and its freebies such as extra RAM, extra mouse, a laptop case, and a trolley.
It is good to practice to only purchase what you need, and not let the inner-auntie in you buy what you think is the best deal.
2. The Classic Nine – 9
It is a common encounter if you were to walk into H&M or anywhere for that matter, you are greeted with price tags that end with 9.
$29 or $30, we know they are the same but we tend to be more inclined to buy things when they are priced at $29. Telling ourselves, “it’s okay, it is still within the twenty-mark.” Yes, I too am guilty of that.
Sometimes, $29 items get way more sales than items priced at $24! Maybe it is due to the hassle it is to receive $6 in change than just $1?
How to make you buy a $2,000 watch? Place it next to a $20,000 watch. How make you commit to a $99 facial package? Next to an attractive $399 package that they never intended to sell.
This is called anchoring. It refers to how we as humans rely on any available information provided when making your purchase.
4. Manipulating the Situation
Honestly, we hear this a lot in sales pitches. I once went for a trial facial session, the salesperson was telling me how important it is to take care of my skin and that it would only cost me about $1 a day.
It is how $1 a day sounds more achievable than $365 a year that helped her manipulate the situation to seem more feasible to fit my lifestyle or anyone’s lifestyle for that matter.
Editor’s Note: If anyone is curious, I resisted and did not sign up for that package.
Or, they would “create” a new category by changing product names to entice you to purchase like buying yourself an Americano instead of regular coffee.
By changing the product name, it manipulates the situation that consumers have nothing to reference to that product, allowing them to manipulate the price.
One classic example would be an Americano costs $5.00 at Starbucks but Kopi O costs $1.00 at coffee shops.
5. 3 Pricing Options
Whenever I am welcomed with a range of pricing options based on the size of the drinks. I am more inclined to pick the “safer” option which is the middle option.
It is a common practice for shops to add a super-premium product to manipulate you to choose the next best option – the middle option.
In actual fact, the middle option is premium-priced.
These are the common practices that shops do to make you spend more on things that you do not necessarily need.
Fun fact: Music used to be downloaded for free, but people are convinced by Steve Jobs to do otherwise. How? By charging 99 cents. Odd right? But it works.
Do you know of any companies that practice psychological pricing strategies? Let us know by commenting below. Don’t forget to share this with your friends!
Don’t forget to check out our blog for more unbiased information to help you along in your personal finance journey! If you do have any questions, feel free to ask Our Community for help (tip: you can ask anonymously if you’re shy!), we would be honoured to be able to assist you in your personal finance journey.
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