Are discounts profitable for us or stores?
A sensible view of sell-off tempting offers
There is nothing more irresistible for human mentality than the offer to sustain and improve their wealth. Have any doubts? You shouldn’t. A discount can feel attractive even when the price before the sale tells a different story. Compare the final price rather than the size of the discount on the tag.
The discount promises to satisfy all these needs: to avoid loss, to gain benefit, and to get pleasure from a purchase. And everything would be just fine if the great and powerful Retail wouldn’t try to employ this weakness for its own gain.
Evident benefit, but only not for you
It’s no secret that discounts have turned into the main driver of commerce since long ago. This fact as such does not pose a problem since good faith sell-offs are mutually beneficial. The problems start, when the seller’s actual profit is built from obviously fake discounts. Check the price history before trusting a discount.
Is there any way to protect your wallet against fraud wearing the mask of benefit? Of course. The first thing you need to do is to learn more about the most widely spread methods of deceit during sell-offs.
1 cent discount... if you are lucky
Does the price sticker have the old price crossed out, while a new one is written with the three-times larger font and brighter color? Does a bright yellow price sticker promise a «Special Offer»? Look for a dirty trick. A marketing professional did the uttermost of his power to make you focus attention on potential benefit, and not the real or previous price of the product.
If it’s possible, have a look at the original price sticker, since it’s quite likely that it differs from a new one just in several cents. Then again, you can be even less lucky: the brightest price stickers are often used to disguise offers with their price unchanged.
Discount from the «recommended» price
The range of methods of sneaky sellers includes the technique that works even against the most attentive buyers. We mean the discount from the so-called «recommended» price.
The recommended price is the amount a manufacturer states as preferable retail price. However, the recommendation is not an official bid or obligation for a seller. Moreover, the recommended price most often refers to the upper border of the market offer, that is why this discount is actually a barometer of seller’s greed.
If a price sticker shows discount from the recommended price, spend a couple of minutes to find out, what actual average market price for the product is. It may turn out to be close to the «discounted» one.
Discount from the double markup
A seller may raise a price before a sale and then advertise a discount from that higher price. What’s the result? On a good day, you will buy the product at its usual price, but you can also unwillingly pay more than the usual price.
Bolder retailers don’t even bother to take care of gradual price increase. They just announce «discount from the previous price», even if it has never been stated on the price sticker. In 2016, a lawsuit challenged Macy’s discounts based on purported former prices.
A sale label alone cannot tell you whether the price is low. Compare it with earlier prices and offers from other stores.
Additional discount
This is what the seller counts on stating the first price reduction of 20% followed by the other 25% discount. A buyer carelessly adds together 20 + 25 and concludes that he can buy a product with 45% discount. «Oh, but this is almost 50%! Great benefit!» — he thinks. Not a bit of it!
There is no point in adding «additional» discount since 25% is deducted not from the full price, but from the already reduced price. Thus, we get the formula of 100% x (1 — 0.20) x (1 — 0.25) = balance of 60%, which means the discount amounts to only 40%. Keep this trick in mind the next time you are offered an additional product discount during the sales.
How to fight fake discounts?
Compare all offers
Have you noticed a tempting discount? Search online quickly to compare with other market offers. You can do it even from your mobile phone! And don’t yield to phrases like «limited time offer» or «only 24 hours». These techniques are intended to force you to waive your right to make an informed decision.
Follow the dynamics
If a shop shows earlier prices, compare them with the current offer. You can also keep a note of the price yourself and compare offers from other stores.
Tracking price dynamics shows whether the price was raised just before the sale, so you can tell a real discount from a staged one.
Don’t trust frequent sell-offs
Have you noticed that some stores announce high discounts once in two months? These sales have nothing in common with seasonality or product range replacement. The truth is that during other periods they sell an overpriced product so that the «discounted» (which is actually ordinary) price seems unquestionably beneficial. In some marketplaces, discount offers are even permanent. Think twice, if such business is worth getting your money.
Even if, with our help, you have proved that the tempting discount is not fake, don’t let it become the main reason for purchase. If craving for benefit brings about unplanned or evidently excessive spending, this has nothing in common with being a prudent buyer.