- Business Insider spoke with marketing experts and found that coupons trick you into spending more money than you save.
- When using a coupon, most people feel so excited that they buy too much, buy items they don’t need, and spend over their budget.
- Tricky marketing tactics like “BOGO” sales and “Act Fast” slogans all push consumers into buying more products.
- Visit Business Insider’s homepage for more stories.
Couponing has become an increasingly popular hobby in the US, as companies distributed 256.5 billion coupons in 2018.
While many think clipping coupons and chasing the biggest sale will save you a ton of money, there is growing evidence that the opposite is true. Business Insider spoke with several marketing experts and found that the coupon actually benefits the company more than it benefits the consumer.
Here are some ways companies are tricking you into spending more money by offering coupons.
Companies tap into the psychological excitement that you feel when using a coupon.
It’s been proven that an item that costs $US200 regularly is less appealing to a consumer than something that is $US400 with a 50% discount because deals and sales excite people.
“The thrill of using a coupon and getting a better deal than other consumers takes precedence and shoppers lose sight of the actual cost,” Utpal Dholakia, a professor of marketing at Rice University, wrote in Psychology Today. “The result: Regular coupon users often spend more for an item than those who don’t use coupons.”
Coupons typically force people to buy items that they don’t need.
Coupons are designed to lure customers into buying items that they don’t need. In fact, 63% of people said they have bought an item that they don’t need just because they had a coupon for it, according to Consumer Reports.
To avoid falling victim to the scheme, Dholakia told Business Insider you should only use coupons for items you need.
“If we are talking about groceries (where coupons are common), make a shopping list first, then try to find coupons for the items on the list,” Dholakia said. “That way, you will only buy things you need and get a real deal instead of buying things you may not use.”
Companies trick you into buying more than you actually need when using a coupon.
Brands tap into the “buy in bulk” ideology that couponers love. Consumers believe when you buy more than you need at the moment, it will pay off in the long run. But the truth is that you rarely break even. Most times, you end up with too much of one item and only use a fraction of it while the rest spoils. Bulk buying can even lead to hoarding-like tendencies, unhealthy eating habits, and ultimately, an empty wallet, according to Dholakia.
“They spend more because they end up buying items they don’t really need just because they are on sale, or buying more of an item because of how the promotion is structured,” Dholakia told Business Insider. “This is quite common in grocery product categories but also occurs in other categories like fashion.”
When a coupon has an expiration date, you often feel the need to act fast.
If there is a time crunch attached to a coupon or sale, consumers are more likely to buy a large quantity so that they don’t have to pay full price in the future.
Keeon Yazdani, chief marketing officer of WE R CBD, said his company sends these types of coupons to its customer base regularly.
“Below the coupon code, we always disclose the expiration date for the coupon code,” Yazdani told Business Insider. “We use language like, ‘Act fast! Supplies are limited! Time is running out!’ We have found this builds a sense of urgency with our customers because they will want to stock up on our CBD products before they go back to the original price.”
“BOGO,” “50% off,” and free shipping sales are specifically designed to make you spend more money.
Michael Anderson, a marketing specialist at GeoJango Maps, said his e-commerce company has implemented these types of sales because they encourage consumers to spend more.
“The reason this works so well is that humans hate the pain of losing something more than they enjoy the satisfaction of gaining something,” Anderson told Business Insider. “Due to this, customers often face post-purchase regret if they know that they could have received a deal on an item but didn’t capitalise on it. This regret, or perception of regret, causes customers to spend more when there’s a deal on the table.”
Coupons are designed to make it easier to spend over your budget.
When using a coupon, it’s easier to talk yourself into going over your budget because you convince yourself that you’re saving money in the long run.
“Using coupons is only one way to go over budget. Many shoppers make impulsive purchases even without coupons which can throw them off track,” Dholakia told Business Insider. “Bottom line: Use coupons with caution and careful thinking. That way, you’ll end up saving money, shopping prudently, and consuming your purchases wisely.”
- Read more:
- The 20 US cities where shoppers save the most money
- I tried ‘couponing’ for a week – here are 5 reasons why you should try it too
- The only right way to save money on groceries
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