Shopping online has never been easier. With automatic payment systems made easy thanks to online banking, you can save yourself a shopping trip whenever you need to buy something, even if it's as basic as groceries. However, the rise of digital commerce has also prompted retailers to explore ingenious ways to trick customers into spending more money than they initially planned by sneakily disguising them as promotions.
Of course, this doesn't mean that all discounts and promotions are traps. Many of them are genuinely good deals that don't prey on people's shopping habits to push as many things as they can onto unwitting buyers. In this article, we'll go over some of the most common retail spending traps, give you some pointers that will help you avoid them, as well as make the most out of them whenever possible.
What are Retail Traps?
Some retail traps are intended to trigger impulse buying, whereas others lead customers astray to compare prices that may or may not have been totally made up. Oftentimes, these traps are set up solely for the purpose of selling products that clog up store shelves.
While they originated in physical retail, shopping traps have been translated to the world of eCommerce remarkably quickly and easily. One may argue that the online shopping environment has made it even easier to get people to spend money on things they don't really need, all in the name of making a quick buck. It's difficult not to agree with that statement, especially when you consider things like digital countdown clocks during sales, pop-up ads, and price comparisons coming at you from all sides whenever visiting a store website.
How to Spot Retail Traps
How does one manage to avoid shopping traps all the while being able to save money when shopping online? You probably won't get away with a single strategy. It should always be adjusted to the particular store you're shopping at, as each establishment has different methods of persuading customers to make a purchase. Finally, your shopping situation is an important factor, as sometimes, you can actually use certain retail spending traps to your advantage, depending on what items you need to buy at any given time.
We've listed five of the most popular tricks and traps below. You will surely recognise some of them from your own experience. All of these have originated with physical retail and were cleverly translated to the world of eCommerce - knowing their roots and basic premises will help you avoid getting scammed both online and during your trips to the mall. Finally, we provide you with some simple ways to stop falling for these kinds of traps and keep track of your spending.
Trap #1: Clearance Items
The first shopping trap on our list is a tricky one (on the other hand, they're all tricky in their own right). Clearance sales have been around for ages, and not all of them are designed to trick people into purchasing goods the store doesn't want to keep in their inventory anymore.
It is important to know that most genuine clearance sales stem from necessity. Sometimes, they're announced because a certain store is going out of business. Another instance might be when big box stores, like BestBuy or Walmart hold products that are getting rebranded or pulled off the market completely. In order to make any money on them, they need to get rid of these items as quickly as possible.
However, many businesses began using clearance racks as a way to trick people into buying products that haven't sold too well, without decreasing their price by one bit!
In Physical Retail
Whenever you see a clearance rack on display at one of your favourite stores, a red light should go off in your head. More often than not, the items sold there are simply the last models the shop has in stock, and they are desperate to push them.
You might say that in these cases, they are, indeed, "clearance" items. However, nine times out of ten, the store doesn't actually lower the price. Merely slapping a big, red "CLEARANCE" sticker on a pair of shoes is enough to trick our brains into thinking that a discount has been applied, so why lose money on actually decreasing the price?
You'll often find the clearance sale rack right at the entrance to the store (or even outside of it). This is designed to capture your attention before you even get an overview of the pricing within that particular shop.
Online Version
In eCommerce, clearance sales are even easier to carry out, and the retailers have little to no reason to stay honest. All it takes is one click, and the "CLEARANCE" banner is live on certain parts of the site. Shoppers have no way of verifying these claims, and the clever placement of these sales right on the home page or at the very top of category pages makes them really difficult to miss, and even harder to resist clicking on.
How to Avoid Getting Trapped (or Make the Most Out of It)
Whenever you're shopping online for any kind of clearance-marked product that is available from more than one source, you should double check with other sites to see whether or not it is available there at the same price. If it's higher, then the clearance deal is legit. If it is the same or lower, then it's a clear sign that you're being tricked into buying products the store wants to get rid of without making the effort to give buyers a legitimate incentive to make the purchase.
Trap #2: New Store Membership Cards
Store memberships are a very clever retail trap. This is because they aren't necessarily bad in and of themselves, and in some cases, they can actually be beneficial. However, due to the way people go about their shopping, their main goal transformed to getting us to spend more money on the day of setting up our membership rather than turning us into returning customers.
The shop assistant may entice you to enroll as a member in order to receive a discount on an additional purchase. Oftentimes, the terms and conditions of a membership grant a certain amount off the purchasing price as long as the customer spends enough money on their first purchase as a member (this works in a similar way to thresholds, another common retail trap described later on in this article).
This usually results in a situation where you enlist as a member for the sole purpose of earning that single discount and forget about your membership in a couple of hours. On top of getting you to spend more money, the store also gains access to your personal information.
In Physical Retail
The idea of store memberships originated decades ago, and aimed at getting customers to make return visits to particular stores. Initially, it was a win-win situation for both businesses and shoppers. People were incentivized to return to the stores they're members of with lower prices, and the establishments were able to build a dedicated, loyal customer base.
Nowadays, the market is oversaturated with loyalty programs and store memberships. The benefits of these kinds of deals are dwindling, and registering as a member at the cash register has become more of a nuisance than an actual good deal. People enroll as members to stores they may never return to and give out their data for no good reason.
Online Version
In the digital world, memberships are created even more quickly, and they're all the more oriented towards prompting additional purchases. In a way, merely creating an account with a website enrolls you into the membership with the checkbox that can be automatically filled for you. Loyalty discounts are a part of the deal, but they're rarely better than those received by new customers, or certain threshold offers.
How to Avoid Getting Trapped (or Make the Most Out of It)
94% of UK consumers are enlisted in one or more loyalty or membership programs, but only 47% of them have stated that they remain active participants. The conclusion is obvious: most online loyalty programs fail at getting people to make repeat purchases at given stores, but exceed at being effective data gathering schemes.
To avoid getting trapped in a multitude of useless memberships, never let the prospect of small, immediate savings get in the way of your critical thinking. A good way to assess whether or not enrolling in a store's program is worth it is by waiting until your third or fourth visit to that shop before making that decision. If you don't find yourself coming back frequently enough to justify the hassle of becoming a member, then you should probably pass on the offer.
Trap #3: Thresholds
"Threshold offer" is an industry term that most people may not be familiar with. In reality, it's just a fancy term for a deal that most of us have seen at stores in one of the following formats:
- "Spend £50, get a free <product name>"
- "Spend over £100, get a free raffle ticket and a chance to win a brand new car!"
- "Free shipping on all orders above £50"
Thresholds are the favourite tool of creating sales out of thin air for companies on a tight budget. They offer little to no added value, and almost always incentivize customers to spend more money than they initially intended to.
In Physical Retail
Physical stores often resort to putting out threshold deals during the fall or spring sales seasons. People expect to get good deals during these months, and giving them a freebie (often something that has already been pulled off the shelves) for spending more than a specified amount of their hard-earned cash has proven much cheaper than actually reducing the prices.
This strategy is often implemented by outlet stores that already sell discounted products, but it isn't uncommon to see it used by premium brands, as well.
Online Version
Although retailers have used threshold deals for many decades now, they've really begun to bloom in the eCommerce era. The "free shipping for orders over X amount of money" is the main culprit behind this trend. For some reason, people can't resist the possibility of saving a couple of pounds on shipping, even if it means spending a lot more than they planned.
It was the case even as early as 2010. As a Stamps.com survey has shown, 52% of retailers back then considered a free shipping threshold to be the most effective offer they could make. They reported that they increased their profits by an average of $4 per order.
How to Avoid Getting Trapped (or Make the Most Out of It)
If you purchased something only to meet a promotion threshold, you've fallen for the trap. The simplest way (and probably the only one) to avoid this is to only buy products that are on your shopping list. If the amount meets the threshold, you're free to reap the benefits. If not, just pay the full price - nine times out of ten, you'll pay less than you would by trying to catch up to the threshold. Honestly, we could give this piece of advice for each one of the traps laid out in this article, but due to the lack of added value of threshold promotions, it is particularly applicable in this scenario.
Trap #4: Fake Urgency
Limited time offers, periodic sales, seasonal sales, and many other similar sales and marketing strategies are based on creating fake urgency. This concept is designed to make you anxious that by not laying out the cash before the sale is over, you'll miss out on amazing savings and that this chance will never happen again.
In Physical Retail
Fake urgency is much more difficult to pull off at brick-and-mortar stores than online, but that doesn't stop retailers from trying to do so anyway. The most common example is setting up sales with a clear end date, and making that end date stick out on every advertisement, like this:
- "Winter blowout sale! Up to 50% off on coats and sweaters UNTIL DECEMBER 20TH!"
By turning the end date into the centrepiece of the sale, it increases the traffic of incoming customers in the days leading up to December 20th, leading to higher sales numbers in that time period.
Online Version
In online retail and eCommerce, fake urgency got elevated to unprecedented heights. Many sites that sell clothing often stage "limited-time sales" on a daily basis, with some of them doing so multiple times a day! It's incredibly easy to add a countdown timer to a website and trick people into thinking that they only have a couple of minutes before the product they want to buy becomes much more expensive.
Another fake urgency tactic revolves around scarcity. You may have seen it in action when buying plane or train tickets ("only 2 seats left at this price!"), but other online sellers aren't too far behind. The scarcity approach works well in clothing and electronics as well.
How to Avoid Getting Trapped (or Make the Most Out of It)
Due to the fact that it has become so prevalent in eCommerce nowadays, it is becoming more difficult to get people to whip out their credit cards out of fear of running out of time or the store running out of stock. According to one study, we have become conditioned to perceive scarcity as a sales tactic because of how pervasive it became.
In order to avoid falling for this trick, try to do your shopping when you're sober, well-rested, and in a good mood. While shopping can relieve stress sometimes, it has been proven that retail therapy leads to overspending.
Trap #5: Buy More, Get More
While similar in its nature to the threshold trap, this particular strategy revolves around the number of items bought by the customers rather than the amount of money they spent on them. The most common iterations of this tactic include the so-called "two-for-ones" (buy 1, get 1 free), as well as deals that promise related add-ons for specific products.
In Physical Retail
When it comes to brick-and-mortar stores, the "buy more, get more" strategy is not as malicious as in eCommerce. This is because tricking customers that way would require a lot of sophisticated planning, such as printing additional, elevated price tags to make up for the discount. This is why if you buy a product at the mall and get an identical one free of charge, it might actually turn out to be a genuinely good deal.
Online Version
In the world of online shopping, this situation is much different. People tend to fall for the buy-one-get-one-free trap without thinking how easy and effortless it is to alter the product prices in order to cover for the promotion. You may think you're getting an extra pair of shoes for free, when in reality, its price is factored into the cost of the first pair. It's a really scummy tactic, but it doesn't seem like retailers will stop resorting to it as long as it continues to bring revenue.
How to Avoid Getting Trapped (or Make the Most Out of It)
Always compare prices. Make sure to double check whether the pricetag of the product you're shopping for is lower than at the other platforms. In case of two-for-one and similar deals, you might want to whip out a calculator before putting in your credit card info at checkout so that you can be sure that the price you're getting is actually the price of a single product.
Do These Traps Really Work?
In the age of information, it is incredibly easy to try and find deals to avoid paying the full price for any given products. Salesmen and marketers know this, and with how easy it is to alter website data, eCommerce businesses often resort to shady tactics like the ones described above to squeeze as much money out of their customers as possible.
Do these strategies really work, though? As much as we'd like to claim that people are smarter enough to avoid the most obvious of scams, the data gathered across the years seems to point in a different direction.
Data
Looking at the numbers can provide valuable insight into people's purchasing behaviors, and help explain why it is so enticing for sellers to trick people into believing the paradox that they can save money by spending more. The findings presented below are just a few examples of the mind-blowing statistics that shine a light on why people fall for retail traps so often.
- 62% of shoppersclaim to have bought something to cheer themselves up at least once. Retail therapy habits make it easier for people to fall for retail traps as they can justify their spending with a promotional offer.
- People are 4-5 times more likely to spend more money when they're promised free shipping.
- According to a recent CHOICE survey, 9 out of 10 people belong to at least one loyalty program.
- People prefer to get an extra product for free over a percentage discount. This makes easy for retailers to set up "buy more, get more" traps.
- According to one case study, creating urgency can lead to as much as 30% increase in sales.
These statistics look pretty gloomy as they prove that many people are susceptible to retail traps, as long as they believe they're getting a good deal for their money. However, we are smarter than we get credit for. As it turns out, people make informed choices if they are given access to the right information.
- People are increasingly suspicious of discounted products, especially those found online.
- 81% of all shoppers carry out online research before buying a product.
Conclusion: Don’t Let Clever Marketing Get in Your Head, Shop Consciously!
The human brain works in mysterious ways. With good enough reasoning, we are willing to spend more money to save money. However, discounts on goods and services aren't always equivalent to retail traps. Using the right sources and verifiable information, you will be able to buy the products you need for cheaper.
Instead of relying on promotions that scream at you from pop-up ads or e-mail newsletters you never signed up for, look for coupons from websites that specialise in verifying discounts and relaying them over to customers. Sites like Hey Discount were created to clear out the confusion around online deals and help people maximise their savings by providing verifiable, up-to-date coupons and staying in touch with retailers to assess the legitimacy of all deals that come our way. Head over to our home page for the latest coupon codes and deals that will help you shop wisely. Happy hunting!
