Do you ever buy an item without thinking? This means immediately upon seeing a pair of shoes or a new outfit you like, you just pick it up and place it in your shopping cart or bag without considering the financial and other ramifications of the purchase.
Whether a large purchase, like a car, or a small purchase, like a pack of gum, most people impulse buy — at least on occasion. Retailers model their establishments with impulse buying in mind, placing common impulse purchased products strategically.
Although a small impulse buy — like a shirt or a pack of pens, for instance — can be innocent, impulse spending on a larger scale can lead to ineffectual budgeting, loss of savings, and poor personal financial planning. One estimate from the advertising agency Mediascope indicates the average American shells out $114,293 in their lifetime on impulse spending. This means we pay around $1,350 each year and $112 each month. Does that sound about right for you? This is enough money to pay a cable bill, or maybe pay for your household’s auto insurance.
A publication by AARP suggests that in your efforts to avoid impulse spending, you should make a “what the heck was I thinking?” list, containing items that gave you buyer’s remorse. Here is a list of common impulse buys that may just end up on your list.
1. Sale and Bargain Items
If an item is marked 50 percent off or bogo (buy on get one free), you are more likely to impulse buy that item. Mediascope indicates sale price as the single most motivating factor for an impulse purchase as it impacts 88 percent of your impulse buys. It’s really easy to be tricked by these marketing strategies. You may think to yourself: “Those shoes are $49, but they’re buy one get half-price, so if I buy those shoes and another pair, I am really getting a deal — two pairs of shoes for $73.50.”
Retailers have pricing these strategies in place that are designed to draw you in. Psychological pricing strategies like “two for one specials” and “BOGO” make you feel like you are getting a special bonus, when in reality, the one product you are paying for may be marked up to account for the discount on the other item.
Now, this does’t mean sale priced items are a bad thing. In fact, avoiding paying retail is the mark of a smart shopper. However, if you go into a store intending to spend $20 on a pair of flip flops, and you leave the store with two pairs of shoes that put an $80 dent in your wallet, you may need to reexamine your strategy.