Catherine Rusoff
Buy one, get one free! Spend more to get free shipping! Save 10% with this special discount code! They’re the kind of sales pitch that consumers often find impossible to resist. However, spending money to save money – or “saving”, as the practice has come to be called, rarely benefits the consumer. Instead, retailers’ clever marketing strategies convince consumers they are getting a deal, when they are often just overspending.
In short, buyer beware, experts warn.
“I understand the appeal of checking out and having a notification pop up telling you to spend $10 more to get some benefit,” LendingTree senior economist Jacob Channel told CBS MoneyWatch. “But 90% of the time, when you break it down, it doesn’t make sense. You’re not really saving money if you’re spending more.”
Agreement or no agreement?
A number of common marketing offers offer the lure of savings – as long as you spend enough money. They include:
- Spend over a certain amount to get a “free” gift
- Spend enough to qualify for free shipping
- Buy one get one
- Buy extra items to use a coupon or discount code
- Subscribing to a service to qualify for a discount
If these tactics sound familiar, it’s because they’re widely used by a variety of retailers, from grocery chains to clothing stores, noted Ted Rossman, personal finance expert at Bankrate.
In fact, there is nothing illegal or even especially underhanded about these offers – after all, merchants are in the business of making money, while consumers have some responsibility for determining whether a deal is worth it.
Likewise, it is up to buyers to be aware of sales gimmicks that subtly entice them to spend more.
“Retailers have always known this trick and are very good at what they do,” personal finance expert Rachel Cruze told CBS MoneyWatch. “They know that if we run a promotion or offer free shipping if you spend ‘X’ amount, you’ll spend more money. Psychologically, they’re good at knowing how to attract people.”
Why buyers fall for it
But why do consumers fall into the trap of spending more in the name of saving? Part of this often comes down to FOMO, or the fear of missing out, a limited-time sale or other supposed bargain, financial coach Nicole Victoria tells CBS MoneyWatch.
“It’s a question of loss aversion, or perception of loss,” she told CBS MoneyWatch. “You feel like you’re wasting money paying for shipping and you’ve invested time and resources into filling your shopping cart, so you’d rather get something more.”
Of course, spaving isn’t always a mistake. Sometimes spending more money on something you were already planning to buy makes financial sense and can lead to real savings. But Victoria said it can be completely wasteful when, for example, you buy large quantities of perishable products that you can’t consume before they expire or spoil.
“It’s not all bad, but the part that is most harmful is impulse buying and inferior quality items, such as fast fashion or things that you don’t necessarily need. leftovers,” Rossman said.
These days, however, savings can accumulate credit card debt at a time when APRs hover near record levels, he added.
How to avoid spaving
In general, it’s wise to disregard deals that invite you to spend more money than planned, experts say.
“Sometimes, it’s better for you to ignore the notifications and just buy what you originally intended to buy. It’s a matter of not getting distracted by something shiny,” said the LendingTree channel.
It’s also helpful to keep in mind that the merchants behind “buy one, get one free” and similar businesses have one mission: to get you to spend as much as possible to increase your income.
“Keep that mindset in mind. They’re not there trying to help you save money,” Channel said.
Other tips for resisting the temptation to add products to your shopping cart in hopes of saving money or earning a reward:
- Stick to your list. List what you need when shopping – and stick to it.
- Unlink your credit card from retail websites. Storing payment information online makes it easy to spend money in just a few clicks. Sure, it may seem like a hassle to enter your card number and go through the checkout process, but that’s exactly the kind of friction that can help reduce your spending.
- Unsubscribe from promotional emails. Sales notifications alert you to events and direct you to shop on sites you weren’t planning to visit. And be careful with social media – if you follow accounts on TikTok or Instagram that encourage you to make purchases (often because they have a financial incentive), this can lead to more impulse purchases.
- Sleep on it. Establish a 24-hour rule before making any unplanned purchases.
