Do you find yourself collecting more stuff than you need because you feel compelled to take advantage of a bargain? Ironically, bargain hunting can be an expensive habit — one that consumes time, energy, and more money than you’d like to admit — but you can learn to keep your cool when you come across a crazy deal.
Now, don’t pretend you don’t love a bargain. We humans are hardwired to seek a deal. Even when we can afford to pay more, we’d rather pay less — but why? It has a psychological explanation, and retailers use it to push our buying buttons all the time.
Understanding the bargain-hunting brain
“Loss aversion” is a term coined by Nobel laureate Daniel Kahneman to describe the universal psychological phenomenon of loss being felt much more keenly than gain. If you win $100, for instance, on a happiness scale you might feel four out of ten; but if you lose the same amount, your unhappiness would rank eight. Because we perceive loss to be so negative, we’ll often go out of our way to avoid it.
A bargain minimizes the sense of loss while still providing the happiness of gain — which can also be explained psychologically.
According to Money Mindset Coach Kel Galavan, “Finding a bargain activates the reward centre in our brains. The release of dopamine, a neurotransmitter associated with pleasure and reward, gives us a sense of accomplishment and satisfaction. This satisfaction can be further exaggerated if we feel like we’ve outsmarted the seller or if the bargain was hard to find or involved some effort on our part.”
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In fact, the effort required is part of the thrill of the hunt. Since primitive times, we have always responded with urgency in pursuing any necessities that we perceived to be limited. To nab something before it gets away is a real ego-boosting achievement that we can brag about later. Marketing strategies rely precisely on that instinct.
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Retailers manipulate our competitive buying urges in a variety of ways. Becoming aware of tricky marketing tactics can help you keep a cool head when you encounter them.
Whether it is scarcity of time or scarcity of a product, the principle of limitation moves people to act. Limited-time offers, dwindling supplies and exclusive privileges can all be used to present something as extra-special. This persuades consumers to buy quickly, before they miss the chance. Black Friday and Cyber Monday are classic examples of limited-time offers that create an effective sense of urgency.
A savvy bargain hunter always considers quality, and we often rely on the original price to be an indicator of value. Price anchoring, however, can be used to give an inflated illusion of value so that the marked down price seems like a real steal. An item at 50% off an outrageous price can feel like a treasure, but remember — the retailer never expected to sell the item at the inflated “anchor” price in the first place.
Another approach, often used with online subscriptions, is to give the consumer options where one is obviously the best deal. While you were only looking for the minimal option, when you’re offered a lot more value for a little more money, it’s hard to resist — especially when the next higher option gives only a little more value for a lot more money. You can feel smug about choosing the best deal even though you’re spending more than you intended.
These and other tactics can be very convincing; and the illusion of savings is apt to addle our brains into buying big bargains which, added up, amount to a small fortune.
Better bargain hunting
The bargain-hunting mindset can serve us well when times are tight, but if you are easily swayed by promotions, you’re liable to accumulate a lot of unnecessary stuff just for the sake of getting a deal. Here are a few suggestions for smart bargain hunting:
Aside from sly marketing techniques, there are actual scams to watch out for. Online sellers, especially, may not make good on their pie-in-the-sky promises, so be sure to read reviews and stick with reputable merchants.
Counter impulse buying with good self-discipline. Wait until you’ve researched and evaluated the item to make more mindful purchases. For online shopping, especially, let it sit in your cart for a couple weeks. Often our enthusiasm for something dies down after we walk away, sparing us a regrettable investment. If it doesn’t, waiting may actually bring along a better price.
Let’s face it. A lot of things are cheap just because they are cheaply made. Look for quality materials, reputable manufacturers, and good reviews before snagging something on sale. Buying one item that lasts is more cost-efficient and satisfying than buying several that don’t. If it’s out of your budget, watch for it to go on sale.
These days, it is a simple process to find out everything you need to know about a product before purchasing. Online reviews, ongoing sales, price comparisons and similar options should all be considered before you break out the wallet.
Keep a clear concept of what you’re after, and avoid browsing assorted items that you are not in the market for. You can always find heaps of stuff that you didn’t know you needed, so go in for the hunt knowing what you want and stay focused on your target.
Based on need, value, and budget, decide how much you are willing to spend on an item and stick with your decision. This may mean shopping around or waiting patiently for a sale, but it will save you from the regret of spending more than you can afford.
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