7 Shopping Jedi Mind Tricks and How to Spot Them

by Darwins Money on 10 November 2010 2 comments
Photo: istolethetv

Retailers are students of human behavior. It's an experiment on a grand scale and as consumers, we're the guinea pigs. For years, adept retailers have been tweaking all sorts of methods to help us part with our money. With the advent of the Internet, data analytics, and complex algorithms to tailor offerings to your profile, retailers have become complete marketing gurus, sometimes knowing our shopping behavior better than we know it ourselves. We all need to consume goods and services, and when we can score a great deal on something we needed anyway, that's a big win for the budget. But the moment you set foot in a store (online or physically), you are subjecting yourself to subtle retailer Jedi Mind Tricks — and you may not even know it.  Here are a few tricks retailers routinely employ in order to increase their bottom line.

Loss Leader

Using a loss leader is a common tactic where a product is sold at a loss or substantial discount in order to generate sales elsewhere. Grocery stores commonly employ this tactic with goods that are perishable so you can't stockpile them or exploit their system. They may also limit the purchase to a small number of units per customer. While it's admirable to plan your weekly meals around these discounted food classifications, people are often lured into other higher-margin parts of the store by the initial lure of the loss leader, and they spend more money than they planned.

Location, Location, Location

Once they reel you in with a loss leader, a common tactic is to house popular items you need far away from the entrance or bury them at the center of an aisle so you have to walk past many other alluring items to get there. Once you're in that aisle, stores often place higher-margin items at eye level and less-profitable wares lower — they make you work for it. Additionally, you can't help but notice all the seemingly cheap (but high-margin) items at the checkout counter. A whiny child or a candy craving often gives way to these unplanned candy purchases.

The Upsell

Upselling is a somewhat related technique employed by salespeople where you are initially lured into a store or discussion for a particular item and end up buying something much more profitable.  Some common examples include the "supersize" option at the drive-through or selling warranties on common appliances and electronics. These warranties are highly profitable to stores and often, employees are compensated handsomely for selling them. With that end of the equation in mind, it's no surprise that warranties are almost always a bad deal for consumers.

Hard Sell

The hard sell is frustrating to experience, yet effective against unprepared or timid consumers. An example would be a very aggressive sales pitch that includes an ultimatum. For instance, one major retailer tells first-time walk-ins that they have to sign up for an expensive membership fee on the spot to join their discount chain or else they're not allowed to enter a store again for several years. As outrageous as this sounds, my best friend fell for this and spent several thousand dollars up front,  saving very little over the following few years due to exhorbitant shipping fees and other add-ons that rendered the "benefits" of the membership rather moot. The reason this hard sell was employed was that if he was afforded the time and resources to research the opportunity further, he would have found it wasn't such a great deal. Multi-level marketers (MLMs) often employ hard-sell techniques as well, imploring you to join their "network" quickly before everybody else jumps on board and ends up on the top of the pyramid. Sometimes, the fear of missing out on an incredible "passive income" opportunity is too great to bear. Meanwhile, the vast majority of all MLM participants actually lose money and don't stay with the programs once they realize they've been had.

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Going Out of Business Sale

I used to see the same "Going Out of Business" signs up for a furniture store in town for months on end. I started to wonder about whether they were really going out of business. On a couple occasions, my wife said, "Hey, maybe we can get some furniture for the kids at a great discount," but I reminded her that the guy in the chicken suit holding the sign has been out there for months. It appeared to just be a ploy to get people into the store. Some states are now enacting laws limiting the amount of time a store can advertise that they're going out of business. Depending on where you live, you may fall prey to this gimmick only to find the same owner happily advertising another liquidation sale a couple years later.

Discount Gimmicks

Stores will often offer something like $10 off a $50 purchase or take it a step further and offer a $25 gift card for a $100 purchase with the caveat that the gift card can't be used until a future visit.  If it's a high-end clothing store where that $25 can barely get you an accessory like a belt or some socks, you'll end up spending another $25 over the gift card amount just to get what you really wanted like pants or a shirt, and this is on top of the extra money you'd spent the last time to reach the $100. Another one I love is when a store offers something at 2 for $5. You can buy the one that you actually need for $2.50, but for whatever reason, this labeling entices consumers to buy 2 for twice the price. It doesn't make sense to me, but it's effective.

Black Friday Switcheroo

Black Friday is just around the corner. It's very common to see thousands of shoppers lined up for hours outside an electronics store trying to get their hands on that $500 flat-screen only to find that the store only stocked four of them. After standing on line for an hour in the cold and seeing that there are other seemingly attractive discounts, the impulse to buy these other items is often overwhelming. Somehow, this monstrosity has become an American tradition. My wife makes the trek each year with her girlfriends. They claim to enjoy it. I don't get the allure of subjecting oneself to the madness for questionable deals, but the stores seem to have it pretty well figured out.

The message here isn't that all retailers are evil and they shouldn't be trying to increase their sales. They should — as you would too as a business owner. However, knowing what you're up against and spotting a Jedi Mind Trick in the works goes a long way in ensuring you're not tricked into buying something you didn't need or paying more for something than you should.

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Guest's picture

I nearly cracked up when I heard what you wrote about Black Friday. It's always made me wonder why in the world a store would advertise something so cheap to 30,000 people in my local paper, then only stock 5 of the items. I never quite understood it.. and yet.. the answer was staring me right in the face. They don't actually want you to buy the cheap item. They want you to buy something else!

I'll just do my Black Friday shopping online again this year.

Guest's picture

There's a furniture store doing just that (the non-going-out-of-business sale) right now in our town, and every night I see the TV ads about how they have only a "matter of days left" till the store closes. Ha! We went and looked - outrageous prices, barely marked down at all - and that was more than a week ago. Now I get that if they won't actually name a date, it's so ridiculously bogus. I was sorry we wasted our time.