A view of the world from my own unique perspective

In this article, I’m going to show you how you can be a more savvy consumer. Now, I know what you’re probably thinking “Bob, I don’t need any shopping advice. When I enter a store, I turn into a shopping warrior! I can spot the best bargains faster than any of my friends. I am immune to the amateurish sales pitches of the commissioned floor staff. I can figure out the exact change in my head before the cashier can ring it up on the register. I can calculate the price per ounce (or per unit) without a calculator. In fact, I am so good with percentages, interest rates, payment schedules and mathematics, that I – just like a Modern Major General – can regale you with many cheerful facts about the square of the hypotenuse. If shopping was an Olympic sport, then Michael Phelps and Usain Bolt would be approaching me and asking for advice!

OK, OK I believe you! However, did you know that merchants are using a subtle form of deception in their advertising, to make their sales sound better than they actually are? They aren’t doing anything dishonest, since everything is stated plainly in their advertisements, but they are taking advantage of our collective innumeracy and lack of analytical rigour.

Take a look at the following items on sale in a recent Back-To-School flyer. What are your initial impressions? Do these look like good deals to you?

   

    

If you think that these are reasonable discounts, then it’s time to let you in on their secret: Merchants will almost always use percentages to indicate the savings on low-priced items. That’s because percentages make the discount seem larger than it really is. Let me show you what I mean. These items are listed below with their savings displayed as dollar values instead of percentages:

---Item                   Price   Savings
   Pencil Sharpener       $2.79    $0.50
   BIC Pens               $1.50    $0.79
   Crayola Markers        $2.91    $0.98
   Sharpie Highlighters   $1.96    $0.99

Suddenly, this sale doesn’t seem quite as wonderful. Would you drive out of your way to save 79¢ on box of pens or 50¢ on a pencil sharpener? Would it even be worth the gas?

Now let’s look at the other end of the price spectrum. In this case, merchants will almost always use dollar values to indicate the savings on their more expensive items. Take a look at the products below – these savings seem fairly substantial, don’t they?

Now let’s convert these dollar value savings to percentages.

---Item                Price    Savings
   Acer Ultrabook    $ 729.99    8.76 %
   Asus Notebook     $1299.00    7.69 %
   Samsung TV        $1699.99    5.55 %

As you can see, the merchants are playing a little game with consumers. At both ends of the price spectrum, they are deliberately expressing the savings using the largest numbers possible, in order to make their sale prices appear better than they actually are.

Hot Buys and Great Deals

I’m naturally cynical, so when things aren’t quantified, I get suspicious. Take a look at the following items, and based only on the descriptions – Hot Buy, Great Deal, Hot Price – try to estimate the approximate percentage that each item has been discounted.

         

The terms Hot Buy and Great Deal may seem enticing, but they mean absolutely nothing – other than “full price”. I was curious and wanted to see how great these deals actually were, so I looked up these items on the companies’ web sites. In each case, this advertised price was the store’s standard retail price, with no indication anywhere on the web page that the price was discounted. Printing the words Hot Buy or Great Deal in the same location as the savings indicator (and using the same font style, colour and size) is designed to invite an inference. Infer nothing – these terms are meaningless.

We consumers may think that we are savvy shoppers who are adept with numbers, but we mustn’t forget that the sellers also have a few perceptual tricks up their collective sleeves. Now that these ruses have been exposed, you are one step closer to becoming a true shopping warrior!

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