• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Personal Profitability Logo 2016

Personal Profitability

Personal finance for hustlers and entrepreneurs

  • Start Here
  • About
    • Personal Profitability Bootcamp
    • Create Your Website in 5 Minutes!
    • Profitability Resources
    • Media & Interviews
  • eBooks
    • The Personal Profitability Complete Beginner’s Guide to Personal Finance
    • Personal Finance Arsenal eBook
  • Blog
    • Income Reports
  • Podcast
  • YouTube
  • Contact / Work With Me
    • Profitability Coaching

The Sale Fallacy – Do You Really Save?

April 14, 2011 by Eric Rosenberg

Share
More
Tweet
Pin
Share

Some people in the world get really excited when things are on sale. “Think of how much money I can save,” they might say. What a deal! But is it really?

The Psychology of Sales

The idea of a sale is simple. Stores try to unload products on you by marking them at a lower price, giving the impression that you are saving money when you purchase it. This is a fairly straight forward marketing technique.

The reason stores put items on sale can vary. At big box retailers like Target and Walmart, the stores will occasionally sell an item at a loss if it will bring a lot of customers into the store. Once you are in the door, you might buy something else that you were not planning on.

Sometimes retailers sell items closer to cost to clear shelf space for new products. These seasonal sales are popular at department stores and clothing retailers that have seasonal stock turnover.

Retailers might tie a sale price to multiple purchases, such as buy one get one free or buy multiple for a discount. Be careful about these, particularly at grocery stores, as you usually do not have to buy multiple products to get the discount. These sales are intended to encourage people to buy more of a product they would already have purchased.

Saving Money?

It is a loungy Sunday morning and you just got the paper (who still gets the paper, right?) from the driveway. You pull out the Target ad and see that your favorite DVD season is on sale this week for $15 down from the regular price of $30. If you hurry to the store today, you can save $15!

But, if you had not seen that sale, would you have bought that DVD series anyway? Would you have waited for a few months and bought it? Is it something you really need anyway? Could you have streamed it from Netflix at no extra cost?

You didn’t really save anything. In fact, the ad just cost you $15 that you would not have spent had the item not been on sale.

Do not be deceived by sale marketing techniques. If you would have really bought the product anyway, more power to you. But if not, you just wasted money on something that you didn’t really want or need before.

Your Experiences

Do you ever get caught up in the sale fallacy? I have to admit that I have on more than one Black Friday. What drew you in? If not, how did you resist? Do you have a friend/relative that you have tried to explain this concept to but failed? Please share your thoughts and experiences in the comments.

Photo by Roland.

Related

Share
More
Tweet
Pin
Share

Filed Under: Budgeting Tagged With: Best Buy, Big-box store, Grocery store, sale, Target Corporation, Wal-Mart, Walmart

About Eric Rosenberg

Eric is the founder and editor of Personal Profitability. He left his corporate finance job in 2016 to take his online side hustle full-time and now earns a six-figure online income.

Get the free Personal Profitability Playbook Instantly

Enter your first name and email address to get your free download and join the Personal Profitability Community.

Reader Interactions

Comments

  1. Barbara Friedberg says

    April 19, 2011 at 9:26 pm

    I’m intrigued by behavioral finance and try to remain mindful of the tactics. Nevertheless, I’m certain that I’m swept away by the marketers on occasion.

    • Eric says

      April 21, 2011 at 4:07 pm

      I think we have all been there once or twice. Thanks for stopping in to comment Barbara.

  2. Edwin @ Cash The Checks says

    April 23, 2011 at 3:15 am

    I hate those “sales” that say buy one get the 2nd half off, that’s not really a good deal since you have to buy two and the first one comes in at full retail price.

    • Eric says

      April 23, 2011 at 3:40 pm

      Agreed

  3. epr says

    December 2, 2012 at 12:05 pm

    This is a good point of view. I’m writing a paper on fallacies for a math course I’m in, so I’m doing research on “appeal of bargain”. I loathe the buy one get one promo’s, or buy X amount get Y amount free. Had no intentions on buying batteries today, but because they are buy 3 get 2 free I will. I didn’t save any money, hell I spent money that I hadn’t planned on spending!! Good article though!!

    • Eric says

      December 3, 2012 at 8:51 am

      You seem pretty smart. Just curious, if you already knew about this idea, why did you still get the batteries?

Primary Sidebar

Connect with Me!

  • Facebook
  • Instagram
  • Pinterest
  • Twitter
  • YouTube

Join the Email List

This field is for validation purposes and should be left unchanged.

Subscribe to get on the path to Personal Profitability

  • Bootcamp
  • Podcast
  • YouTube

I started a little side hustle blog in 2008, and left my full-time day job as a Senior Financial Analyst to turn my side hustle into a full-time gig. Learn how I did it so you can build your side hustle. It all starts with the first dollar.

Copyright © 2022 · Narrow Bridge Media, Inc. · All Rights Reserved

Go to mobile version
 

Loading Comments...
 

You must be logged in to post a comment.