Beware Of These Pricing Tricks Retailers Use To Fool Your Brain

Beware Of These Pricing Tricks Retailers Use To Fool Your Brain
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Retailers are darn good at inventing tricks to separate us from our money. Whether it be through the price points they choose, how they market their products, or their discounting techniques, they are experts at getting inside our brains and influencing our buying decisions. Here are a few of the most popular pricing tricks retailers’ use, along with some easy ways to fight back.

Decoy Pricing Makes Less Expensive Items Look Like A Deal

Decoy pricing is used by retailers to push you towards the purchase of a particular model that pads their profits. The folks at Apple have been using this strategy for years to get consumers to drop money on products that appear to be an excellent value when compared to more expensive models. For example, Apple currently produces the Apple Watch in thirty-eight different designs, ranging in price from $499 to $US14,000+. The uber expensive versions are never going to be top sellers, but that’s ok — that’s not their job. Their job is to make the cheaper basic versions look like really good value by comparison. Consumers who might otherwise scoff at the idea of paying over $300 for a smartwatch might not scoff so hard when the alternative is $17,000. To avoid decoy pricing tricks, consider your actual needs first, then find the best version of a product that fills those needs.

High-Low Pricing Jacks Up The Price Knowing You’ll Use A Coupon

High-low pricing occurs when retailers put a relatively high “everyday price” on items, then often lower their prices via coupons and sales events to make it appear like you’re getting a better deal. While they will never admit it, they never expected you to buy the item at the original price and it’s gravy for them if you do.

This isn’t just a brick-and-mortar trick. Many web sites are guilty of high-low pricing as well. Right before releasing a discount code, they will jack up prices to full retail to make it appear like your code gives you an amazing deal. In reality, the site-wide sales events many web sites continually roll out offer more savings than the actual code. At the very least, make sure you can combine a coupon with a sale price to maximise your savings and trump high-low pricing altogether.

Dynamic Pricing Decides What To Charge Based On Your Buying History

Dynamic pricing happens when retailers tap into your browsing and buying history, and even your physical location, to determine what they should charge you. They’re essentially trying to figure out your ability to pay based on generalisations like how often you pay full price, what types of items you browse, and how affluent your area might be. Dynamic pricing has been used by online retailers like Amazon and Orbitz to maximise their profits.

If you think the price a site is attempting to charge you changes randomly, you’re probably getting messed with. Test out your theory by browsing in incognito mode or disabling third party cookies and then check to see if the price changes. By doing so, the site won’t be able track your spending habits and try to charge you accordingly. You can also check the price on your mobile device to see if it’s different. Some sites will vary pricing based on whether you’re browsing from mobile, Mac or PC. Also, do a quick price comparison to make sure you’re getting the best price available — which you already do anyway, right?

Prestige Pricing Makes You Think A Higher Price Equals Higher Quality

This is a common pricing strategy that tricks you into thinking that because the price is high, it must mean the quality is superior to cheaper versions. Sometimes that’s true, but sometimes, it really isn’t. Obvious examples include perfume, jewellery, and even new cars. When we find inexpensive or discounted perfume, our first reaction is typically to wonder what must be wrong with it, and often pass on it for the full-priced version. Also, many car manufacturers will use prestige pricing when creating a luxury line. Think Nissan and Infiniti: Both are manufactured on the same chassis and engine, but the Infiniti line has a higher “prestige” price tag based on a few more bells and whistles.

Dr Anna Akbari, a sociologist and entrepreneur, explains that prestige pricing often comes with celebrity endorsements and usually forgoes the pennies and decimal in the price as they tend to symbolise a bargain in the minds of shoppers.

The best way to avoid this pricing trick, especially when making a significant purchase, is to always do your research first. Read user reviews of the product to determine if the prestige price is worth it in terms of overall value to you or is it simply a status purchase. In many cases, the cheaper version will suffice.

Charm Pricing Makes You Think The Price Is Lower Than It Actually Is

This one’s obvious: whenever you see an item with a price like $19.99 or $4.97, retailers are attempting to trick your brain with “charm pricing” by marking prices just below a round number. Because we read from left to right, we see the first number in the price and immediately decide if the price is acceptable. According to a study performed by the Journal of Consumer Research, this “left-digit effect” has a significant impact on buying decisions at the point of purchase. Whenever you see a price with .99 or .97, round up in your head before you decide if it’s worthwhile.

“Open the Wallet” Pricing Counts On You Buying Stuff You Don’t Need

Have you ever noticed the elaborate displays near the entrance of many retail stores that sell highly-discounted items? All stuff you had no intent of buying, but clearly can’t live without at the advertised price. The sole purpose of these displays is to get you excited about saving money in the hopes that you’ll open your wallet wide and buy much more within the store at full retail. After all, think of all the money you saved and how that savings entitles you to splurge a little. It’s psychological warfare, and your money is the target. As long as you know this is how stores decorate their storefronts, you can walk by focused on what you walked into the store to buy in the first place

Everybody loves a good deal, but it’s important to make sure you’re actually getting a real deal. Stay aware of how retailers try to trick you with pricing. You’ll be able to easily spot and avoid the tricks of the trade, and get a real deal more often than not.


  • The biggest problem is an economy that requires all of us to buy as much crap as we can, regardless of whether we need it or not. We need a new paradigm to change it into something that works for all layers of all populations. Something that takes the ecology, the location and mindset of the population into consideration.

  • Bahahahah Infiniti. I live around the corner from the local Infiniti dealer and go past it regularly when walking the dog. I have never seen a single customer inside. The salespeople always look melancholic. I feel like I should leave them a care package sometime.

    • Walk up to the door, and at the last second turn and walk away, get their hopes up.

      Have to wonder how car sale yards can stay open if there isn’t atleast several customers a day, the staff are paid on commission mostly, otherwise it is just a base salary. Perhaps their customers are arrogant enough to just walk in, swipe their cards, sign a few forms and drive off.

  • I often wonder also if the ‘spend over X amount to get free shipping’ is actually a good deal. Still I use it with some websites, saves me having to order again by stocking up

    • Depends I believe on the items and the X amount. I was buying stuff for cosplay and the total came to $49.93 and the site had an X amount of $50, I found a $1 item on their clearance page and saved $20 on postage

  • in supermarkets, annoying that they put the milk as far away from the door as possible

    • Worse (Or cleverer depending on your point of view) they regularly analyse buying patterns to work out what products are commonly bought together and scatter them around the store. Staples like milk, eggs, butter, bread are always in remote corners.

  • The left digit effect works particularly well on items that are around $5, people are more likely to part with “$4 and change” then a $5 note, and considering we are a country that mostly uses electronic payment, we tend not to make the link we are still essentially paying $5 (because really, 3c is nothing) because we aren’t physically handing over money.

    Working in retail, I just round everything up in my head, see something that is $19.50, that’s $20, see something that is $47, that’s $50, if I’m not getting back minimum a $20 note as change I feel I am effectively paying the next round figure. $85 may as well be $100. It helps be reduce impulse buying something that appears to be a good price. I might be insane

    • They use this technique on much larger amounts too. $495 instead of $500, $3990 instead of $4000 and so on. I’m sure they’ll even use this for cars in the tens of thousands. Probably not for real estate where the old technique was to advertise houses way below the reserve to get more people interested then hope one of them will magically decide they’ll pay $150k more than they were really looking to buy.

  • Good point about Apple Watch pricing, but it’s a unique product from a hip company. Apple stayed long out of ‘hip zone’ in the ‘nineties and now they’re back. Fashion takes time to dissipate.

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