How Coupons and Bargain Hunting Actually Make You Spend More Money

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If you’ve ever been to an outlet mall, you know there are very cheap finds there. I once found a pair of purple capri pants for a dollar: “But don’t they make me look like the Hulk?” I asked my friend. “Well, it’s only a dollar, so you have to buy them,” she insisted. We walked out of the mall telling ourselves that we had saved so much money, but we actually lost fifty bucks. Plus we had bags full of ugly clothes that we would hate in just a few months.

Do not misunderstand me; I’m not going to hunt for deals. When I buy a new computer, I spend months tracking prices and waiting for a great deal. When I was out of money, I cut out grocery coupons every week.

It is one thing to save money that you already planned to spend. However, finding deals, discounts and coupons just to spend is another matter entirely. And it becomes a problem when you spend too much money or buy things that you don’t even need. Typically, the coupon culture doesn’t make us financially savvy; it actually makes us spend more.

Couponing and thrift are two different things

Thrift is all about resourcefulness , and while most people consider coupons, bargaining and bargaining to be modest, it is often the other way around. They can actually be quite wasteful.

For example, I only wore these purple Hulk pants once because I really didn’t want them, I was just mesmerized by how cheap a pair of pants can be. It was not a thrifty purchase, it was a loss. Another time I was at Bed, Bath and Beyond and used their proverbial 20% off coupon. “Oh, that’s good,” said the cashier. “This is a 20% discount on the entire purchase, not just one product. Do you want to get more stuff? “I didn’t, but I did. I took a look around the store and bought some frivolous nonsense just for a bargain.

Coupons, deals and discounts are so powerful. They encourage you to consume by making you think you are actually frugal. That doesn’t mean they are bad and you should never use them, but for the sake of your finances it is good to know the difference between hunting for deals and being really frugal.

Coupons encourage you to spend (and they work)

You might think that I am thinking too much about this and that a coupon is just a coupon. This may very well be true for you, but overall, coupons make us happy. And there is evidence to support this.

For example, a 2003 New York University study (PDF) found that coupons are not only spending more, they are also being spent carelessly. Researchers looked at over 2,000 customer transactions in stores and analyzed customers who used coupons for a particular type of soup. They found that people who used coupons spent more money on average:

When coupons were not cut, these households were very price conscious and paid an average of $ 0.51 for soups, but when they purchased this category using coupons, their average spending increased to 0.66.

However, this finding does not take into account causality. The fact that coupons spent more does not necessarily mean that they spent more because of the coupon. So in a second study, researchers analyzed coupon-induced spending. They presented the subjects with six different types of hand soaps. Four soaps were cheap; the other two were expensive. Researchers gave out a coupon to half of the participants, and nothing to the other half. Here’s what they found:

In the coupon condition, the average price paid by participants was $ 2.28, while in the no coupon condition, the price paid by the participants was $ 2.07 … This result … is consistent with our findings in Study 1. Consumers tend to value the sensitive and prefer cheaper products, all other things being equal. But when coupons for expensive items are available, the likelihood of buying expensive items increases.

Coupons tell you that you are receiving a monetary benefit, but as the researchers note, it is actually a psychological benefit. According to another2012 study , coupons make us happier and more relaxed. You could even call it a “ coupon high ”.

However, buying a more expensive product is just one way coupons will make us spend more. You should also consider “mental accounting” . This happens when the laptop you want is discounted for $ 100 and you get excited, treat that $ 100 as free money and buy a bunch of other crap you don’t really need.

Coupon tricks retailers use to get you to spend more

So, we know that coupons in general encourage us to spend more, but there are some tricks that retailers use to encourage us to consume . For instance:

  • Raise prices and then put products on sale: clothing brands do this a lot. They will offer a 20% discount for the entire site, but they will increase their prices to full retail before launching the sale. This way you get the usual everyday price, with only the best advertising.
  • Force you to hit the spending threshold before you actually save: You can save $ 50, but you have to spend $ 200. If you were planning on spending so much anyway, it might be a good deal, but chances are you weren’t planning on spending that much.
  • Expiring Deals : Sites with daily deals are a great example of this. There are only a limited number! Time is running out! You feel pressured to buy and you feel special about getting something limited.

The list goes on, but overall, the purpose of the coupon is to make you feel like you’re getting a great deal. You save money. You are financially savvy. In fact, you are just shopping.

Like my Hulk pants, you probably bought something just because it’s just a great deal. When we patrol the marketplaces, this is what we are looking for. Come on, did you really want to buy a quadcopter, or are you concerned about the savings?

I love a lot of things. However, I realized that the reason I am addicted to finding deals is the same reason I am addicted to shopping in general. It’s about the consumer. However, there is nothing wrong with shopping! Sometimes you buy what you really like. For example, last year I stumbled upon an amazing Amazon jewelry sale and stocked up on my Christmas gifts. Everyone loved them and I have no regrets.

None of this means that you should never use a coupon, browse websites with daily deals, or go to shopping malls. You just want to come in with your eyes open; be aware of what’s going on in your brain so you can make better purchasing decisions. This awareness is everything. Everything is under your control. You make decisions. There is a difference between a consumer and a person who consumes from time to time.

How to program your mind to stop buying trash

Best of all, you can program your mind to stop buying unnecessary bullshit . Knowing how retailers are manipulating you into spending more is a good start.

Other than that, here are some of my favorite ways to get out of consumer mode:

For a long time, I believed that bargain hunting meant good with money. Instead of focusing on negotiations, making more money, or investing, I saved. I was not a producer, I was a consumer obsessed with saving money, coupons and looking for great deals. And inevitably my inner customer will take over, ruin my budget, and prevent me from making informed decisions about my spending (Hey, sort of like the Hulk).

And that’s really the key to everything: mindfulness . There is nothing inherently good or bad about money, shopping, or coupons. However, if you want to get the most out of your money, it’s worth knowing how you interact with all three.

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