Monday, September 8, 2008

The Danger of Double Counting Your Savings at Stores

We see it all the time. It is one of the best marketing techniques around and even the eagle-eyed, non-brand-loyalty frugal bloggers fall for it. I'm talking about the "Price of X after Y savings" technique. Let's take a look.

In the CVS ad for 9/7 through 9/11 we see this:
Right Guard Professional Strength
SALE!
it’s like getting it for...$1.99
after extra bucks
thru Sep 11
Deodorant solid 1.8 oz or aerosol 6 oz.
you pay $6.99 - $5.00 extra bucks® rewards = $1.99 after extra bucks
Extra Bucks® offer limit of 3 per household with car

Because I worked at CVS I know a lot of people get confused and think they are only supposed to be charged $1.99 instead of the $6.99.They are wrong.

You will pay 6.99 OOP if you do not pay with a gift card, money card or ECBs.You will lose $6.99 of your money not $1.99.You will however get 5 ECBs towards a future purchase.

The danger in that is customers are double counting their savings in their mind.
A lot of people think in this situation "Oh well, it IS just like paying $1.99 afterwards". But than later on a future purchase they use that $5 ECB on a $4.99 purchase and think "I can't believe I'm getting this free."

They didn't get that item for free. They paid for it when they choose to spend $7 on deodorant.

Am I saying there is anything wrong with thinking that way?Yes.If you are not careful you could be spending way more than what you intended because you are letting marketing departments play tricks on you. If you keep an eye on you expenses that's great! If however your new to "the game" it is important to not get stuck in this mind trick.

1 comment:

Kiera Beth said...

Hi Kathryn - Thank you so much for the post on my site. Your words left me in tears. I was reading over your blog and you seem to be an amazing woman. Congratulations on everything that you have achieved! I hope that you accomplish all of your goals that you blogged about. I will be keeping track of your blog :)

Very true about the double counting. I am very careful to use my giftcards from Mypoints, so I am always "playing" with funny money when I shop at CVS.

-Kiera