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I Have A Deal (or 6) For You!
Posted By Ron On July 7, 2010 @ 6:45 AM In Budgets,Retail,Tips & Techniques | Comments Disabled
A “deal” is usually defined as an arrangement for mutual advantage but most “deals” aren’t. When a deal seems too good to be true, it almost always is, and it’s usually slanted in someone else’s favor.
 Marketer’s have a huge playbook of techniques to make you think you’re getting the best of them, but consumer’s have to be careful to not get ripped off and bust the budget . Here are 6 to look out for:
The fear of scarcity can drive you and me to make a decision without thinking. We’re naturally afraid of limiting our choices and we worry about regretting it. Salespeople know it, play on those fears, and convince us to get out the checkbook .
What this usually results in is 9 too many. This type of pricing structure is most often used on items you wouldn’t buy 10 of anyway. Most of the time, you can purchase just one for a dollar. That means there never was a discount.
Those “as seen on TV” items are major culprits of this tactic. “It’s only $19.95, but WAIT – order now and we’ll double the offer!” That item (according to Consumer Reports), costs approximately $5. By the time you pay postage of $8 on each item, so you end up paying $35.95 for two … and the TV sales guy makes a fortune.
People tend to favor a middle choice and by renaming “small” as “medium” retailers play on that tendency. They tend to leave off the fact that the small size is the one they make the most profit on.
Ever see that sign at a salad bar? Hey, how much could some lettuce weigh? A lot more than you think. Sure lettuce doesn’t weigh much, but bacon, cheese, salad dressing, boiled eggs, kalamata olives, and red pepper humus does. By the time you put your salad on the scales, you’ve spent $10.
I’ll bet you didn’t know that the net profit margin of 99 cent stores (7 percent) is double that of Wal-Mart (3.5 percent). Since people perceive prices that end in 9 as more appealing than those ending in whole numbers, those 99 cent stores are raking it in.
Though these marketing playbook tactics can seem sleazy at times, personal finance IS personal. That 10 for $10 deal may actually be something you need, so please don’t think you shouldn’t take advantage of purchasing opportunities that make sense for your situation. Just make sure you are doing what’s best regardless of the “deal” presented to you.
Photo by Derek & Kristi 
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