Watch CBSN Live

Outsmart retailers who try tricking you

Retailers work very hard tweaking prices and offering special promotions in an effort to get you to spend MORE money.

On "The Early Show on Saturday Morning," Farnoosh Torabi, a contributor to CBS, pointed to five of the most common techniques you'll find in stores. And, once you know what the retailers are up to, you'll be better prepared to only buy what you need!

Editor's note: Much of this was taken directly from a piece Torabi wrote for CBS Moneywatch.

The methods:

Removal of Dollar Signs

Instead of seeing something priced as $20, you might see it as just 20 or 20- (with a dash). The reason retailers do this is because tests have shown that consumers spend MORE when there is no dollar sign present on the price. When there's no dollar sign, we, in our brains, don't always register this as a "PRICE," but rather just a number, and we don't start adding up costs in our head.

In other words, there's no longer a connection between price and ACTUAL MONEY. This is a pricing trick seen most commonly on expensive restaurant menus. Culinary schools actually teach future restaurant managers and chefs to do this!

5 for $5

Consumers often think they have to buy 5 items to get the deal, but sometimes it's just another way of advertising 1 for $1. If you read the fine print, you'll often see you don't have to buy 5 to get the sale price, but some people do - or at any rate, they buy more than they would have, convinced that they're getting some kind of great deal.

99 cents

Prices ending in 9, 99, or 95 are called "charm prices." We've been culturally conditioned to associate 9-ending prices with discounts and better deals. Also, because we read numbers from left to right, we encode a price like $7.99 as $7, especially if we read too quickly. It's called "left-digit effect."

Per-Customer Limits

You may see this type of pricing at the supermarket: "Limit 5 per customer." Or you'll see Groupon and other daily deal sites that say "1 per customer." That leads people to think the product is scarce, so they "need" to buy it, when really they don't.


When retailers and shops offer merchandise and services for "free," there's almost always an ulterior motive. Clearly, when it's a buy-one-get-one-free deal, the retailer still makes money, because you have to spend in order to get the freebie. And in other cases, if something is completely free (like Starbucks giving free coffee on Earth Day), the expectation is that you will still spend money on other products - the "free" promotion was just a way to lure you into the store.

Psychologically speaking, the word "free" implies no downside or risk. Even a buy-one-get-one-free deal or an advertisement for free shipping - which still requires us to spend money - are marketing gimmicks that businesses bank on, knowing consumers simply can't resist.


Many of these pricing tricks play on the subconscious. In other words, we don't even know we're being manipulated sometimes. BUT there are ways we can stay in control of our spending and protect ourselves against these tricks.

Shop (or dine) with a calculator and literally add up the costs

The problem with a lot of these pricing techniques, like the removal of dollar signs or something priced $9.99, is that they make us feel like we're spending less. But if you force yourself to actually plug in the numbers as you're pushing the grocery cart or at the restaurant, you'll see the truth and make better spending choices. You also don't have to be conspicuous and bring a huge nerdy calculator to the fancy restaurant or the grocery store - just use the calculator on your phone.

Shop with cash, and with especially big bills in your wallet

When we use cash, it forces us to face the price tag in a way that credit cards don't. We are forced to think twice about the purchase because with cash, we're limited. A buy-one-get-one-free deal won't seem like a total win-win. Cash keeps us honest with how we spend. As for the big bills: Studies show that we have a harder time breaking bigger bills, because there's more PAIN involved with letting it go. So keep a $50 in your wallet and you'll be less likely to spend.

Ask Yourself: Would this appeal to me if it was full price?

Before you buy anything on sale, even if it's a buy-one-get-one-free offer or marked down to 9.99, always, always ask yourself if you would want the item regardless of its sale price. If it's a pair of shoes, ask yourself if you would have considered buying it at full price. Or, if it's something from the grocery store that says 5 for $5, would you normally buy the product? If the answer is yes, then you're really saving money.

When in doubt - distance yourself from the item for 10 minutes

Behavioral experts say one reason we fall for these traps is because we don't give ourselves enough TIME to shop. We make a lot of impulse purchases and don't take time to weigh the consequence of what we're potentially buying. We simply can't be bothered when we're shopping, so we'll reach for a product that seems like a deal, but isn't. To combat this, I suggest taking a time out while shopping. If you're at a department store, put the item on hold at the sales counter and go take a lap around the mall. Get out of the sales environment and take a breather. Give yourself a little time to think - you'll make a healthier choice.

View CBS News In
CBS News App Open
Chrome Safari Continue