We Love a Bargain: The Psychology of Discount Prices
With the kick-off of holiday shopping just days away, I thought this activity might be timely. How many times have you uttered or heard someone else utter: “…but it was on sale” OR “I got it 40% off” OR “what a steal.” Yes, as the title says, we all love a bargain. Why? This Marketplace article (and audio) explains why:
There is a psychological aspect to this, too. Finding deals can make people feel good. For some shoppers, it’s about the thrill of the hunt. “When there’s something I’ve been eyeing and I see it go on sale, it’s like God just sort of put it there for me,” said Elise Ariel, a 37-year-old legal assistant, as she shopped recently at Century 21 in Manhattan. “How do I feel about sales? Like a moth to a flame.”
And while she admitted that shopping through a price aggregator site for a new pair of pumps, as she might for airline tickets, would be better from a practical standpoint, it would mean an end to her love affair with retail. “You come across something with a little red price tag on it in a bin of God knows what. You feel like it’s destiny.”
Want to see this “thrill of the hunt” in action in a student activity? Come up with a standard item (best-selling book, a box of copy paper (2,500 sheets), a big-screen TV (be clear on specs here), a flight to Hawaii on a given date….something your students will identify with and want) and send your students out to the internet to find the best price. Maybe even use the item as reward..whoever finds the lowest price, gets to keep the item (OK, maybe not a trip to Hawaii or big screen TV but if you use lower cost item). Be sure that they include shipping and handling in the price (common tactic is to lowball the item price and make it up on shipping). Good luck!
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.