The Opposite of a Bargain

Today is “Black Friday,” and people love bargains. Sometimes they love bargains too much and end up injuring others as a result. I hope that doesn’t happen this year, but even some mild pushing and shoving is a sign of poor perspective.

Despite the history of Black Friday, the fact that most of us like bargains can be lost on the experts. In early 2012, Ron Johnson, the new CEO of JC Penney announced a major overhaul of their business plan.  “Fair and square” low pricing was to replace the idea of weekly sales and promotions. He assumed everyone could see through those “fake prices” – marked up to be reduced later. It was logical. But Penney soon found out that shoppers aren’t always logical, especially when anticipating an exciting adventure of hunting for deals and then being able to boast about their cleverness. It’s in their shopping DNA, giving them a psychological boost and a feeling of pride to discover how much they “saved.” 

But that is not always the case, as we can see from this Bloomberg story, headlined: “How Companies Get You to Pay More for the Same Product.” 

Some of the tricks are quite old, like the word “repeat” on shampoo instructions or the suggestion to not let kids use more toothpaste than the size of a pea, implying that adults need to use more. 

Many times we are forced or tricked into either paying more or getting less for the same price. But there are also cases where companies use artificial scarcity to boost the price and desirability of the products. The article discusses five categories.

“Shrink-flation” is how they term getting less for the same price. The standard example is ice cream. “Häagen-Dazs brand reduced the size of its ‘pint’ containers from 16 ounces to 14 oz.” Likewise, what used to be a half gallon, became 1.5 quarts several years ago, and now my favorite comes in at 1.43 quarts. The same is true of candy bars and other sweets, but also of some breakfast cereal (17.3 oz.) and canned green beans (14.5 oz.).

The next they call “Auto Bundles.” “The average new car cost more than $37,000 in October, mostly from the desire for bigger SUVs and trucks, but “options packages and custom trim lines can swell a sticker price by thousands of dollars.” The 12-inch touchscreen for a Ram truck adds almost $8,000 alone.

“Premium Economy” is the new trick airlines use to offer more legroom and amenities to those wanting more but unwilling to break the bank to fly first class.

The “Women’s Brands” category emphasizes how women often pay more for the same product from jeans to deodorant. It’s called the “pink tax” and has been around for a while. One brand even advertises their products as “pink tax free,” although that's hard to prove for their tampons.

The last category is the most problematic as it seems to prey on individual’s need to impress – a real perspective killer! It’s dubbed “Fashion Drops.” European luxury brands and other are trying “to put scarcity back in the equation” with special releases of limited productions. (This artificial scarcity has long been practiced by the diamond industry.) One such example given is Kanye West “Yeezy” Adidas sneakers.

Looking up fashion drops was a learning experience. One site, drophype.com (at least they are honest about the hype), promises the latest news on these highly desirable, special releases; but the last posting is 2 years old, so either the hype has cooled or they just fell behind. But some of those Yeezy sneakers sell here for $999, or only $28 a month! 

Those are apparently the latest tricks and lures for unsuspecting shoppers. Good luck for Black Friday shopping, try to keep some sense of perspective so you don't end up owing a monthly payment on your footwear.