How Retailers Use Discounts to Make You Spend More
Retailers often rely on price drops to make customers feel excited, using ‘fake discounts’ as powerful psychological tools to drive spending.
Oftentimes, discounts are genuinely good, but sometimes they’re engineered to make you buy more, even when you don’t need the item.
Not only do discounts release dopamine, making shopping feel rewarding, but they also encourage you to shop on impulse and aren’t always as good as they first seem. Just because something is discounted doesn’t mean it’s a deal.
This guide reveals why discounts work on your brain and how to avoid marketing tricks that lead to overspending. Learn how pricing psychology works and shop smarter!
How Discounts Trick Your Brain into Spending More
The “Gain vs. Spend” Illusion
Example: “Was £100, Now £50!”
This trick makes your brain focus on the £50 gain rather than the fact that you’re still spending £50. Often, retailers also increase the “before” price to make the savings seem bigger.
We recommend checking the price history of an item, before committing to one of these deals. Price Spy UK and PriceRunner are two online tools you can use to check price history.
The “Decoy Discount” Trick
Example:
- Basic Plan – £5/month
- Premium Plan – £15/month
- VIP Plan – £20/month (Now £15).
Retailers sometimes introduce an overpriced option (£20) to make the cheaper plan (£15) plan seem like a bargain. This is common with streaming services, phone contracts and software subscriptions.
For example, the £15 deal isn’t as impressive if you originally intended to buy the £5 plan, so we recommend having a good look at the features included to make sure you actually need the pricier option. Most of the time basic plans suffice while being a fraction of the price of mid-level options.
The “Buy More to Save More” Trap
Example: “Get 3 for £10 (Normally £4 each)!”
These types of deals make you buy more than you originally intended and are most common in supermarkets and on clothing and beauty products.
You end up spending £10 instead of £4, even though you only needed one item. If you actually need all three products or they’re everyday items you use quickly, these offers are great, otherwise, it’s just a higher spend disguised as a deal.
The Urgency Effect (“Only 2 Left at This Price!”)
Example: A booking site says, “Only 2 rooms left at this price- book now!”
The pressure of these deals triggers the fear of missing out, making you act quickly without checking other deals. To avoid falling for this, check prices at different times. You’ll often find that many “limited time” deals reappear later.
The “Bigger Discount” Deception (Percentage vs. Money Off)
Example: Retailer offers “50% Off” instead of “£5 Off.”
Retailers tend to use percentage discounts to make savings seem bigger.Your brain overvalues percentages, even if the actual saving is small. For instance, if the item is low-cost (£10 or less), a percentage discount of 50% sounds bigger than it really is (£5).
How to Avoid Fake Discounts & Impulse Spending
Being aware of the tricks retailers can use to encourage spending is just one way to steer clear of ‘fake discounts’. Here are a couple more tips you can also use to avoid impulse spending on overhyped deals.
- Wait Before Buying
The main thing you can do to avoid fake discounts is to remove the emotion from shopping. A great way to do this is to give yourself time and avoid impulse spending by using the “24-hour rule” before checking out.
This rule is perfect for making sure you actually want to buy something and aren’t just being influenced by a big discount or boredom.
If you leave a product in your basket, sometimes retailers send you flash codes to encourage you to buy, so it’s well worth trying this trick to save some money.
- Make sure the price is legitimate
We also recommend using a price tracking tool to see the price history of your product. With these tools, not only can you check if the old amount advertised is genuine, but you can also pinpoint trends in discounts to learn when the best time to shop for your item is.
You can also compare the price of your product against discounts at other retailers to make sure the price drop is genuine.
- Shop in clearance sales
End-of-season stock reductions and clearance prices tend to be the most genuine discounts. We recommend heading straight to these sections for real and impressive discounts. You can even filter clearance sections by discount or price to find the best deal.
To find the best clearance sale discounts from popular online retailers, you can always type “Clearance Sale” into the search bar on the NetVoucherCodes website. Some of the best clearance sales currently available include:
- Up to 80% off in the Gtech Warehouse Clearance Sale
- Up to 80% off in the Tweeks Cycles Clearance Sale
- Up to 90% off in the You Know Who’s Clearance Sale
While shopping in a clearance, make sure you look out for a ‘works with sale’ promo code. Codes that can be stacked on top of sale prices are great for increasing savings. Student discount codes and Blue Light Card codes can often be used alongside sale items so make sure you take advantage of these if you’re eligible.
Keep your eyes on our page for all the latest clearance codes currently available.