The shady economics of ‘buy one, get one free’ deals
thehustle.co
thehustle.co
As a consequence, BOGO feels like a better deal than one item at 50% off MSRP. A 50% discount is a change in the asking price; the value of this item must have depreciated in some way for the seller to want to get rid of it (e.g., this garment is going out of season), and the price I'm paying is a fair deal that I'm happy to accept because I don't need to indulge in extravagances.
But in a BOGO deal, the asking price hasn't moved (or, as the article discusses, may actually be inflated); the fact that I paid full price means that it retains its original value, and the one they throw in is simply an enticement. In other words, I purchased an extravagance at full price, but it was a deal because I walked out with two. The amount paid is double the previous example's, but the perceived value is fourfold.
This isn't even getting into the actual value of perceived value (cf. the sticker price of wine vs. its perceived quality). Really interesting stuff.
I fall foul of this trick quite a lot when food shopping. For example if I'm buying a box of cereals and I see one is priced at £1.80 and another is priced at £2.50 but is on sale from £3.50 I'll buy the more expensive one because I'm under the illusion that I'm getting a good saving and a better quality product. In actual fact though I've just spend quite a bit more for a marginally better, if not the same quality item.
However... you don't know what the brand is. The brand may be the store brand, which... while it's brand loyalty, is almost always the cheapest, and usually don't have any marketing expense beyond the product in the store in the first place.
I've learned to love most store brands, and... it may be my mind rationalizing it, but I think they've actually become much better quality wise than they were 20 or 30 years ago. But again may be a trick of the brain.
Biggest issue I see is that store brands often don't have the same level of variety. Chips - store brand may have 4 flavors - other vendors may have 10-12 on the shelf above. If I really want a specific flavor, I'll get a name brand, otherwise, just go with store brand (or.. with chips, hopefully skip altogether!)
One place that I can't quite find a non-brand name replacement I like is laundry detergent. I've tried the cheaper brands, store brands, etc..., and always end up back on Tide.
I remember reading that many of the costs of the in store offers and promotion are actually pushed to the supplier. Leaving Tesco, Asda etc on same margin as before. I suspect this hits smaller suppliers disproportionately.
Maybe it's different in the UK than in other places, but the large supermarket chains are constantly running so many promotions that you can, if very brand disloyal, always shop smart based on bogofs and alike.
I do this and it drives my wife nuts. For example, she likes Diet Coke. I see it as diet soda and will buy whatever diet soda is on sale. I only eat fish or steak when it's on sale, otherwise it is chicken all week.
I also remember a time when I needed a new dishwasher, and one shop had it from $300 for $200, while another shop just had the same dishwasher simply for $200. I got it from the second shop, of course.
However, for broader product categories, there's also a tendency for the most and least expensive products to be outliers, with the cheapest being barely enough to justify the label and the dearest being aimed at rich suckers. Hence the heuristic of getting the 2nd cheapest (especially if it's a one-off consumable, where savings won't accumulate); or, if splashing out, getting the 2nd most expensive.
In my experience this definitely applies to things like wine and chocolate, where the scale is roughly:
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u| x
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Price> Restaurants realize that many people won’t order the least expensive wine (no one wants to look like a cheapskate!) so they often go for the second cheapest. That’s exactly why it’s often the most marked-up bottle on the list.
[0]: https://web.archive.org/web/20131210062034/http://www.urbans...
In semi-blind taste tests I've always preferred the name brand of cereals but not enough to pay extra for them, so when they come out to be the same price as the store brand per ounce I'll buy them otherwise I just go with the cheapest option.
That the cheap store brand is made by the same company that makes the expensive brands is true, one only has to check the manufacturer data on the label.
Only thing though was that the selection was purely visual, M&S wouldn't take any "uglies" (we were told that if we let any in the whole batch would be rejected).
The expensive strawberries were the same ones from the same fields, same picking and packing just put in different boxes with different labels, and they conformed more closely to an idealised strawberry shape.
A good lesson to learn early on.
If they do a factory run for "Brand A", adding the label is a component of that run. There's three main outcomes:
- The product passes Quality Assurance / Quality Control, and sold to mainstream retailers
- The product fails QA/QC, but for cosmetic reasons only such as marring on the packaging or label misalignment. These get sold to discount retailers such as Big Lots[1], but still under the main brand.
- The product fails QA/QC due to a reason that makes it ineligible for public sale. Depending on the margins of the product, it may or may not be worth some level of re-work to make it eligible for sale within one of the two bins above. Otherwise, it's either donated (if the product is safe but ineligible for sale due to some regulatory reason such as consumer protection laws around the word "New" on labels) or scrapped (and might be sellable for some industrial use) or destroyed.
But in all cases, it's still "Brand A" and not sold as a completely different inferior brand.
Private label runs are different. A retailer will come to you with a specific set of requirements around ingredients, price points, profit margins, etc and you'll design a formula that matches their requirements[2]. While the manufacturer is leveraging the same machinery, product formulation expertise, and procurement capabilities, the end result may be completely different than any product you actually sell in your name brand portfolio due to differences in priorities and market goals. For example, Costco, Walmart, and Dollar General may be relying on the same manufacturer for their private label trashbags. But decisions on the thickness of the plastic for the bag, whether to use "break protection" patterns on bag design, whether to incorporate draw strings or just little flaps of plastic, whether to package it in a cardboard box or plastic sleeve, etc are all made in coordination with the retailer requisitioning the private label and will end up as a distinctly different product than both the private label runs for other brands as well as the manufacturers own name brand formulations.
Ice cream is a really big one here. You'll notice that it's always sold by volume (fluid ounces) rather than weight (ounces). Manufacturers control the volume of air that gets incorporated into the ice cream, and can use the same amount of product by weight to produce a pint, quart, or half gallon of ice cream. Both within the name brand portfolio of the company and the private label runs, you'll have wildly different end products based not only on the ingredients chosen for a specific formulation but the density chosen as well.
[1] These discounters also tend to get inventory that is perfectly fine, but that didn't turn fast enough and you're willing to let go at a discount to get it out of your warehouses.
[2] You'll also see this within some name brand portfolios as well. You'll see this in the form of retailer-specific model numbers for something. This happens for lots of reasons, from Amazon having specific Alexa functionality incorporated into the version of a product to Walmart demanding a compromise on warranty period or part quality so that they can get to the retail price point they determine is most optimal.
We did double blind taste tests on nearly every type of food we could think of. It's still amazing to me how infrequently the brand name won in terms of flavor.
Take that as you will, sample size was only about 25 students and my memory might be flawed. But I'll never buy brand name chocolate chips again in my life, I remember that much.
There are slews of items that have laws governing them. Milk is milk. Butter has to follow a formula. Flour is flour, rice is rice.
Butter might feed their cows differently, though, and flours have different gluten contents. Rice can be different varieties. In all of these, however, there isn't much different.
Other things are preferences. For example, my father preferred any-brand-but-Kellogg's corn flakes, but my spouse is in the only-Kellogg's-will-do camp. There isn't much difference between brands after that: Kelloggs flakes tend to be thicker and it changes the taste.
There are slews of store brands that are much better in taste - and ingredients - than their name-brand counterparts. The store brands aren't spending lots of money advertising, after all, and can invest that money into making products that are yummy. Having good-quality store-brand products gets people into your stores.
The issue for consumers is that every decision now is about weighing up brand differentiation - DTC is no longer about commodities, but about niches.
Unless you absolutely know the exact type of product you want (i.e. you definitely want some flakes of corn), my take is we're shopping in "ranges". e.g. I need something to eat for breakfast, and I won't be offended at paying more than £X for it.
I find it the same with soap - on a basic level, a 35p bottle of handwash is the same as a more expensive one, but I've now been primed that there's this range of prices I won't be offended at paying, and if something more expensive is reduced into that range, I'll snap it up as a "deal" because it was out of reach and now it's in reach.
I suppose we should rationally evaluate the benefit that the new cereal independently of the price. And then if the benefit outweighs the cost, then we should buy. But we aren't robots, and we like nice things.
Ps I often buy the wine that's on offer, it does depend on the supermarket though, as some just sell rubbish. It stops me having to look sagely at a half dozen bottles, that I have absolutely no basis to differentiate between, other than label.
We recently had some Tesco own label sausages substituted for higher cost branded ones and the Tesco ones where vile and unedible.
Having come from a council estate, there is a certain mindset behind getting a deal for everything, making your little money go as far as possible, buy one get one free, or discounts on anything, or coupons to get into restaurants or discounted vacations, or companies that "get you deals" on all your electric, gas, TV, internet bills, 8 packs of cheap beer, etc. are all seen as victories and you are crazy for not taking advantage of them. There's an emphasis on getting more quantity for less money. That's easily exploited.
We're in a quite good position so it doesn't matter as much but it's often easy to get lost in the rebates and forget how much is actually spent.
Are you buying it because it is cheap or are you buying it because you need it? Often people buy stuff they don't need because it is on sale "right now."
A good way to get around this is to keep a "wishlist" of things you actually need and then if there is a sale you can get it.
Even when they understand money has been spent, it's not spent rationally: money "saved" at the grocery store doesn't actually mean less total money spent, rather the same amount as usual is spent, and more food than usual was able to be purchased.
This is a fine tact if you're going for volume, but it's absolutely not "saving money."
Often the "deals" are "buy 3, get one free", where the per unit price might be a bit less than a single unit, but if you only went in for 1, but ended up buy 4, you've paid more than you might have otherwise. Sometimes it's a good deal, and you get more value, sometimes the items expire before you end up using them, etc.
Anyhow, sorry for being confusing. It's possible this example isn't all that common in general. I just bump into it all the time.
We have some Belgian waffles that cost 18 NOK a piece. They always have an offer that gives you 2 for 20 NOK.
I never eat more than one of these and they end up spoiling as they don't last very long, and even if it seems that I'm "saving" 16 NOK on the purchase I'm actually spending 2 more than I otherwise would.
I'd agree that a "savings" figure on a receipt is bogus though, as it's comparing a price you wouldn't be charged with one you would.
Spending money is never a savings. All you can do is spend less than what you were willing to spend. I know our way of speaking isn’t going to change anytime soon but I hope to change the way people think about saving. I hear people who are broke talk about how much they saved in the scenario you presented. But they have no savings at all and it is bad for them to think they saved money when in fact they spent money. Spent money is not a savings.
"Save 100% by not buying anything!"
From my own experience and pretty much every one I talk about this, people have a tendency to buy things they'll never need. (I constantly try not to do that, but it takes active thinking about it all the time.) No discount deal is cheaper than the one where you don't buy something you don't need.
Then there's underestimated costs that aren't immediately visible. If you buy more stuff of items that you use over a longer timeframe you'll have to store them. Which of course means you're paying rent for the space in your flat that's taken up by excess stuff.
In reality, you're spending more and drinking more than you really want to.
I may be in a minority, but I prefer to buy a couple of beers just once in a while.
Plus they're overpriced anyway
I've actually seen a couple cases where the bundle "offer" was a worse deal than buying individually (e.g. get one for $1 or a 2-pack for $3). I almost got suckered by it too, because I needed more than one item, so lazy-thinking said a multipack made more sense.
Haven't used Tesco delivery for years, but their "best offers" always brought back the 10p and 7% savings, the real savings were on different tabs or buried in search. There was a search by cheapest, never by price per unit. Funny that.
I'd imagine while a pain to deal with non round SI measures it should be reasonably easy to work out price per unit, no?
This is actually the same tact credit card companies use, even if the balances are paid off every month. That's why we still use budgeted cash from envelopes to pay for most things. The only payments we run through a card are fixed costs where the percentage paid back on the card exceeds the transaction fee if any.
All the information is there, in plain english, to allow people to use a credit card simply as a way to keep an electronic ledger, get an interest free loan until the auto pay date, earn some cash back, and have some purchase protection via the ability to do a chargeback. You can even set spending limits online.
Similary, I wouldn't say a buy one get one free offer or 75% off sale sign is tricking anyone either. Assuming you've passed 4th grade, you're stupid if you're not calculating unit prices.
I actually prefer this. It's much better than shops that activity try to hide shipping costs until the last moment. Also it makes comparing prices quicker.
Consolidating the S&H into the item cost makes sense for a subset of situations sure, but there's a huge set where it's exploitive.
Amazon orders for example often can amortize S&H costs by shipping a single package containing multiple items sharing a common origin. I'd argue that's true for a huge portion of Amazon orders. It's simply not a good generalization.
Having a fixed per-item shipping costs lowers overhead drastically, especially for smaller sellers. Large sellers obviously have different customers and I doubt they get away with just multiplying PER_ITEM_SHIPPING_COST X NUMBER_OF_ITEMS (I didn't think that was the focus on the OP though).
I also disagree that it does not generally apply. Given two items, A & B, you might have the following total:
A_shipping + A_price = A_total
B_shipping + B_price = B_total
AB_shipping + A_price + B_price < A_total + B_total
A_shipping < AB_shipping
B_shipping < AB_shipping
An industry that works on 3% margins already.
So that means the webship has to know where I live and what kind of shipping I want. Granted, Amazon probably already knows this, but when I use a new webshop, they can't know this, and I don't want to have to tell them before I can see the price of their items.
It's better than not knowing the price until I tell them where I live.
> It seems to me that what you’re really saying is that they need to know where you live and what kind of shipping you want before they can show you the real price.
If they want to include shipping in the price, then yes, they need to know where I live before they can tell me the price. So either they can't tell me the price, or they will change the price after they learn where I live, or they won't change the price and lose money on it, or they may refuse to ship to me. None of these options are in any way reasonable, except maybe not telling me the price, but that's extremely annoying.
Better to not include shipping, tell me shipping is not included, and add shipping later. That way, shipping cost can be the real shipping cost, rather than shipping cost for 1 item times the number of items, which is likely to be more than the real shipping costs.
Not at all, how that price is built up is extremely relevant. If an item is cheap but shipping is horrendously expensive, I go look if I can find it at another webshop that has more reasonable shipping. Shipping is part of the total price. Pretending it's not is taking information and choice away from the customer.
There are exceptions to this. For example, I trust McMaster-Carr to charge me whatever they get charged for shipping, which is good because they won’t tell you in advance what it will cost. But in general it’s just another number. It’s a really common scam to have a cheap item with expensive shipping in order to trick people who aren’t paying close enough attention.
Put it this way: store A is selling widget X for $40 with “free shipping,” store B sells it for $35 plus $5 shipping, and store C is $15 plus $25 shipping. Who do you buy from?
For example, if C sells something else that I want that's also much cheaper than a the other shops, and it won't increase shipping costs much, then that's the better option. If not, I may continue to shop around until I find a shop that combines low item price with reasonable shipping cost.
As you say, your store preference depends on various factors. If C’s shipping costs are structured one way, you’ll prefer them. Another way, you won’t. You have to know all those details before you can choose. That’s my point: ultimately, functionally, there is no difference between a random store that won’t show you prices until you give them your location, and a ransom store that shows prices immediately but won’t give you shipping costs until you give them your location.
Yes, this is why these tactics work. The human brain is being hacked by shady practices.
- If you return the item you will be refunded the total purchase price instead of the price of the item sans shipping.
- You know how much it will actually cost to own the item when its in your cart instead of hiding the cost until the last second when you've already committed.
"Why am I paying for prime?"
Of course, I soon realized that this was all simply a tactic to encourage people to continue to spend their money in the store, an effective one at that. The "sale" price was really no different than the standard price at any other retail store. It was just the perception of getting a good deal and triggering the dopamine receptors in the brain. I told my wife this, but her reaction was one of incredulity. Her thinking was she was saving money by shopping there. It's such a simple, yet brilliant tactic. Make people feel like they're getting a good deal, and they'll spend more money than they otherwise would.
You will find people vigorously defending their behaviour when challenged on this. For example: Amazon Prime.
Amazon Prime is a product that costs you money and makes you spend more money on Amazon, and yet people will defend their spending saying that they are "saving" money.
The shipping is "free" but you have to spend £8 a month to qualify. If you don't spend at amazon during that month you are still down £8 (that's about £100 a year). If you spend something at amazon during the month you are still down the £8 in addition to the money spent at something.
Amazon Prime is a shady product designed to get you to spend money at Amazon.
As the article says often you will find the same product for lower in other places. You just need to do the sums. Another common defence we will see when people respond to this is "Oh I know it doesn't save me money, it's the convenience".
Retailers love making their customers comfortable and not thinking about these shady offers. Imagine having millions of customers so happy they will pay more money to you and defending this very process.
Now... there's also the shady dark patterns the company uses to sign you up for it and make it it harder for you to cancel, but that's another thing!
I bought from some other online retailers and had bad experiences (stuff taking ages to arrive, customs fees,bad returns policy etc.)
Plus you get Amazon Music and Amazon Video too - I never use them but still...
It used to be a lot cheaper in Spain though to be fair, like 20 euro per year so it was a no-brainer.
The easy returns process is something I really value with Amazon.
I've never seen Prime as a purely money-saving scheme. It possibly does save me a bit overall (but not every month, for sure) on the things I genuinely want next day, but I also get the convenience of weekend delivery which either isn't available or is very expensive without Prime (from Amazon or other options), or certain drop-site delivery locations that don't seem to be available & cost-less without Prime. There is also the utility value of not needing to think about delivery as much.
> designed to get you to spend money at Amazon.
That much is certainly true. But it doesn't have to cost you more that way than it would anyway.
> You just need to do the sums.
Shopping around can be time-consuming, especially as every other retailer is pulling similar tricks so you have to make an effort to see through their crack as well. Though I do sometimes double-check and find the Amazon price the same once delivery is accounted for in both cases. Sometimes there is a saving to be made. Sometimes that saving has a convenience cost.
> Another common defence we will see when people respond to this is "Oh I know it doesn't save me money, it's the convenience".
Is paying for convenience inherently wrong in your world view?
IMO, spending time and/or cognitive effort to save money has to be weighed against what-ever else you might be doing with that time/effort (going out for a run, playing with the cat, doing some work, just enjoying doing nothing really, ...) otherwise you are guilty of exactly the same sort of false economy.
I was channelling the spirit of the article.
But for me it's not that something is convenient on it's own, it's 2 things. Firstly, it's that it's shady and manipulative and that people will defend this when challenged by saying "oh it's okay I don't like to think about it, it's convenient".
Secondly because a BOGO offer (or Amazon Prime) lowers the cognitive load it is explicitly a convenient thing for us. our brains think we are both getting a deal and we are having a smooth ride. It's easier to not do the economics and it's easier and smoother for us to think less even if we spend a little bit more.
>There is also the utility value of not needing to think
>Shopping around can be time-consuming
>Spending...cognitive effort to save money
Now, making money isn't wrong, nor is hacking on psychology, but I don't see any comments in HN defending BOGO. We all like to think we are rational and that it's others who are the crazy ones.
Other companies don't have stuff like the lockers which are really useful if you're working full-time and live alone.
Walmart can be convenient too. The prices are about the same as Amazon and depending on where you live you can have your product in hand in however long it takes to pick it up locally (~30 minutes or less let's say). Order it online, pick it up locally.
And if it's not available in the store right now, they ship it to their store for free in usually a day or 2. No membership required.
Picking up locally is not great if you don't drive.
I don't always use prime delivery but I still come out ahead.
OTOH you also get prime video and music.
Prime Video has a lot of HBO stuff (Sopranos, The Wire, Curb) and while prime music's selection is limited, they have a few great electronic or classical stations for studying (commercial free).
I'm more likely to get rid of Netflix than Prime given all that's bundled in.
I use up about 1.5 loaves of bread per week, so some weeks I buy one loaf, some weeks I buy 2. If it is a week where I only need one, but it is BOGOF I just buy 2 and put on in the freezer (and then take it out the following week). It is a similar story for cheese (although that doesn't need to be frozen, staying in the fridge, sealed, lasts for long enough).
One of the bigger savings we have got from a food perspective is to move towards making a 'menu' of food we are going to eat that week. Then buying the ingredients needed for each dish. This means little or no wastage (good on so many levels), being able to buy at a good price (rather than not getting something required then picking it up at somewhere convenient buy more expensive halfway through the week) and knowing the quantities up front makes it easier to either buy in bulk, or knowing when a deal that involves extra quantity will be suitable.
The above approach has also meant eating much healthier food, not finding ourselves in a position where we order take away because we don't have anything in. Ensuring we have not only meals planned, but healthy snacks (fruit etc) factored in too. It isn't a binary choice of by doing this we get everything 100% perfect, but it has been a hugely noticeable improvement.
I have read several times that some of these approaches and typically favoured by those who have more disposable income, which isn't ideal, as we really want those with less income to be getting all the good savings to try to ease/stop the wealth gap.
The disposable nature of income is orthogonal to wealth. It is possible and common to be wealthy and still be broke. Consider the pro athletes earning 7-8 figure income that are still forced into bankruptcy. It is also unrealistic to think people who are weak at saving money need a nanny to follow them around and police their spending habits in an effort to close the wealth gap.
The most straight forward means to close the wealth gap is to tax capital gains as regular income and incentive spending from the wealthy with a punishing estate tax.
It's largely unprepared idiots that pay any substantial amount of estate tax.
My wife and I usually recognize the good deals. We avoid buying stuff we don’t usually eat just because it’s on sale.
Certain things are terrible to buy BOGO especially at gift shops, firework stores, and generally any tourist area. Another commenter mentioned Nashville boots and I can attest it’s a rip off trying to make you spend more. Single items have inflated prices at these places.
The 'true price', if you can say such a thing exists, of an item is almost always what it periodically goes on sale for. If you watch the historical pricing it will dip to a specific price anywhere from 6-24 times a year. As long as your happy with that price then feel no shame for pulling the trigger -- if not then you at least know when it really is on sale.
Example: my personal vice is Diet Coke. The true price in my area is $0.25/can but it often retails at $0.41/can to make it seem like a sale. I will buy in at $0.25 but it's not a real sale until it hits $0.20.
In most cases, however, it feels like they only benefit the merchant, by manipulating the consumer to buy things they don't need, or more expensive things.
I don't think the cost savings I'm missing out on by not making purchases in the first category outweigh the extra costs I avoid by also not making purchases in the second category.
That said, I'd love to hear of more ways of how deals can actually benefit both consumer and merchant.
Of course, you could still benefit from this if you were to visit that store anyway, or would have bought those products anyway. However, that's still the case in my "ignore deals" strategy: I don't actively avoid deals, I just try not to use them as a reason to buy something.
(Though maybe it's not surprising that people get fooled in politics.)
As a child I remember considering the difference between "extra free" and "free" which I used to see on cereal boxes. Sometimes the box claimed "10% free!" but other sneakier boxes would claim "10% extra free!". The latter allows the marketer to quote the same nominal figure for a smaller absolute quantity.
I'm not sure they're trying to be sneaky. The difference is too small for anyone to care about:
- 10% free! (purchase price pays for 90% of the cereal)
- 10% extra free! (purchase price pays for 91% of the cereal)
(Also, it's the first option that indicates a higher unit price, not the second.)
I also agree the difference is small in this case but I'd argue:
* Small wins are still wins.
* The difference is not so small with bigger percentages.
We noticed that all of the stores selling cowboy boots (and there are multiple) have a "buy one get two pairs free" offer. All boots in the store we checked out seem to be priced at $300+. So, instead of simply offering discount boots at ~$100, they're leading you to think you're getting $300-quality boots and $600 of "free" value in the extra pairs. Framed like that, who could possibly refuse?
The other day a friend and I were discussing the “take X% off your entire order” coupons. These seem to be very common, lately. She mentioned that she recent used one on a cart of $100 in items. She expected a $20 discount. But, to her surprise, she only received $2 off. Apparently all but one of her items were ‘restricted’ items.
It seems like many companies find it easier to trick people than to actually provide great service or products.
I offer it not because I want to deceive people, but because we sell more that way. People like predictable upfront prices without having to tell anyone their location.
It is, of course, not "free". We just calculate the average shipping cost and pad the price.
In other words, free shipping sellers work hard to find cheap shipping. Those that do not offer free shipping seem less inclined to do so.
I don't know how much ups/fedex costs.
UPS and FedEx charge for large packages by size, not weight. They call it "dimensional weight". And ding heavily for big+far.
Their shirts, which i used to have dozens of - are now priced at $69 per shirt... less 40% for this sale.
Ive never paid $69 for one of their shirts in the past. So the 40% off now reflects what i ised to have paid. So i feel they raised the prices of their shirts, then hold frequent 40% off sales to lure in traffic of people thinking they are getting a great sale - only to pay what the full retail of the shirt used to be.
So Express literally found a way to inflate sales of product through this tactic.
One interesting note is that in general you don't have to buy two items as part of a BOGO, you can buy one at half price. Now this is not true as some manufacturers, namely Coca Cola, require the purchase to be made as described. Meaning if its buy two get one you must take all three. They even get silly with Publix in that there will be buy two get two with Coke products that, you guessed it, you have to have four of the product to get it at the price of two.
They also offer a discount if you only want one pizza, and a discount if you collect instead of having it delivered.
I'd argue this is legitimate, or at least everyone is footing the bill when you request delivery. But that's no different than everyone footing the bill for having tables and chairs in the shop.
And “free” delivery never is, at least in then US where tips are expected.
There is a certain brand of shelf stable non-dairy milk that my family use a lot of. The usual price is £1.50 a carton. Every few months there is a 3 for £3.00 offer. Now this is obviously a ploy to get you to buy more than you needed and also to appeal to new customers.
But I use these offers to stock up on weeks worth of the stuff. If has a shelf life of over a year so it's a no brainer. I hardly ever pay full price.
A big super market near my house runs 2for1 buns every day for the past year.
I've got desensitised to the point where I don't even see the "original price" anymore. The deal price is just the real and only price. The only real deals are the "almost expiring" price reductions super markets put out before throwing out old food.
I wonder if in the grand scale of things this abuse backfires or I'm just a rare case as a foreigner.
There's plenty of grocery stores in NY that continuously run the same "special" on the same items. I've seen the same hot dogs on sale for the same price for a year.
The buy one get two variant is fine as long as there is actual profit to the customer and no shady 'you still pay the same but it looks different' offers.
What I usually see these days is that products get offered on sale which have not been sold before so there is no way of knowing if they offered it before for less. Though internet helps if you are in a shop and it sounds dodgy at best.
You are only allowed to discount items already in stock a month before the start date[0] That's why the back of the shop is fully loaded by boxes a month before the sales period starts.
The rules seem silly because it's an open secret, all companies jack up the price and stock up just before... but you'd be hard pressed to find actual proof:
"I ordered 50k items to the supplier just 30 days before, I meant to buy only 50, fat finger mistake, so we had to discount them".
"Yes, the reference price is based on the highest price we had on record among our 500 stores. Yes, I know it was more than twice the median price, fat finger mistake but hey, who does not make mistakes, 14€99 is too similar to 5€50..."
[0]https://www.service-public.fr/professionnels-entreprises/vos...
You can also see when an item is reaching its long term date[0]: 180-days(or 365 on some markets now) in inventory point: sudden drop in the price. The margin can get negative because the long term fee is very hefty.
Say you sell SD cards or a similar low volume, low cost item: at a certain point in time, the storage fees will be larger than profit, selling them for 0€01 then makes sense...
[0]https://sellercentral.amazon.com/gp/help/external/200684750?...
Supermarkets here have gotten big on "buy one get (1, 2, or even 3) free" for large meat packages (racks of ribs, for example), but keeping the price tag high-- say $12 per pound. If you fully exploit the offer, you're effectively paying a bargain $3 per pound, but that requires a lot of fridge space to deal with four big packs of perishable meat. The consumer who says "I only need one or two" is being gouged for NOT wanting to throw rancid leftovers away.
A similar related gimmick are the "buy N, save $M deals." If you buy any ten of a pool of random items, they knock off $10 from the order, but if you only need 9, or 1, you're paying full price.
There's definitely been a swing from "everyday low prices" to "gimmicks and games." Everyday low price became "3-day sale" became "only with club card" became "only if you install our terrible app and explicitly select you want the promotion ADDED to your club card."
I think the ultimate goal is to get where they can advertise aggressive discounts, knowing they don't have to give them to anyone but the people most willing to jump through hoops to get them.
[0] https://www.asa.org.uk/advice-online/promotional-savings-cla...
Conversely my wife is Chinese. Over there 'buy one get one free' usually means something like buy one dress, get one flimsy, non colour-matching belt free.
It's (un-) surprisingly hard to find academic information about this on Google because all the results are click bait articles about how to improve sales, rather than peer reviewed theory.
In a similar vein, I have just finished "Nudge: Improving Decisions About Health, Wealth, and Happiness" by Thaler and Sustein. This might be worth a look as well.
It isn't just BOGO offers, anything free is suspect:
* Just pay postage! (postage is nearly as much as the item costs on Amazon/eBay/others with delivery included, and it'll take up to six weeks for your item to arrive)
* Do the Great North Run for free! (... plus a £320 charity pledge)
* First month free! (if you don't cancel 27 days before the free month ends you'll be paying for the service for at least 6 months afterwards)
yes, this is a terrible bait and switch - and should be illegal unless the fine print isn't so fine that nobody reads it.
And surely there are browser plugins that help you remove annoying DOM elements in one click?
https://pastebin.com/raw/VcgNNwDp
https://web.archive.org/web/*/https://plus.google.com/104092...
For example I feel a nice non-iron, fitted, button down shirt shouldn't cost more than $20, so I only buy when I see them at, or around that price, BOGO or not (and I need one/two). Same goes for lightning cables, I'm not paying more than $5/(10ft)cable no matter what material it's wrapped in.
Having it completely "Free" as the spend $12 Beer for Free T-Shirt example doesn't work in Asia as well. Because you would soon realise these market wont pay a $12 product to get a "Free" T-Shirt. It only works in Japan and Korea, and that also depends on the products.
Generally Speaking, Discount is better than Free with Strings attached in Asia Regions. Pricing Strategy, Consumer Expectation and Product Selection is so vastly in every Asian Market are part of the many reason why many large Retailers failed in China.
Quote “”Retailers are often as guilty as you can get with manipulating price of an item,” says Cohen. “You’re often charged a price that nobody has ever paid; anything that’s free is just carved off the regular price.””
Coca Cola is, I think, the classic example of a product where fair cost has become irrelevant.
And other than the econ classes, business classes aren't modeling behavior or doing much theory work, so they aren't making assumptions like rationality.
That's why the smart man will find deals himself. E.g. instead of waiting for a prospect from a cars dealer that makes him a good offer, he will study what makes a good second hand car, when the prices of second hand cars are lowest and then he will go and make an offer to a caring owner of a car to become its second hand owner.