Free Is Almost Never Free
I read a great comment today by Dan Ariely who is pushing his new book, “Predictably Irrational: The Hidden Forces That Shape Our Decisions.” His comment was, “It sounds strange, but try not to look at price, not at first. Decide what you want and what you’re willing to pay without being influenced by outside factors.”
I completely agree with this. I have often said to my wife, and anyone else who will listen, that a half-off sale at a store where the items are listed at twice what they are worth is not a sale. How many times have you seen “Clearance Sale!” at a furniture store? There is one near me that is holding a perpetual clearance.
Ariely also talked quite a bit about the perception of getting something for free.
One Halloween I gave a bunch of trick-or-treaters two Hershey’s Kisses, then told them they could have a small Snickers for free or a huge Snickers for the price of one chocolate kiss. The bigger bar was a better deal, an 8-to-1 return on chocolate. But most chose the smaller one; the idea of getting something for nothing was too tempting.
Free is one of the the biggest enticements there is. It is pretty common to hear, “And free with your order…”
Probably the most successful marketing gimmick after “look what we will throw in free,” is the rebate. I remember when these first came on the scene back in the ’70s. People were saying, “What a bargain. I’ll get something back.” Are you kidding me? How about we just get the item for a fair price with no gimmicks. I avoid rebates like the plague. I will often tell sales people at a store that has a rebate for an item I want to purchase that if I cannot get the item discounted then-and-there, I am walking. (I say that with a smile, however.) That occasionally gets me an “instant” rebate. Most of the time, it does not.
It is sometimes difficult to see past the “free” and “limited time” promotions, but the best savings are often obtained by investigating items ahead of time, knowing what a “good” price is, and then using coupons or upcoming sales to gain an advantage.
Stumble it!
Reduce Spending and Squeeze More From Your Paycheck @ The Carnivals:
[...] Free Is Almost Never Free @ Save and Conquer [...]
17 April 2008, 9:53 amChris:
A common sense post but its something many people need to see, over and over again actually. Having said that, rebates are a unnecessary evil that will be with us forever. It’s a scam by the companies to lose less money on low margin items in many cases because people either forget to send the rebates in, or they’re denied for the dumbest reasons (or in some cases because, lets be honest, people can’t read directions to save their life).
If you play the system right you can save alot of money but it takes both time, which many people don’t want to spend, and knowledge (which many people just plain don’t have). It’s why I avoid them like the plague. I know how the system works and how to win, I’d just rather save the money outright and put it in something that gets me a return; period
17 April 2008, 7:56 pmBryce:
@Chris – Thanks for the comment.
Yes, I harp on this message quite a lot. Slick advertising makes people think they are getting a savings on a purchase when they are actually paying more than they should.
And I agree, rebates will be with us forever. Sigh.
18 April 2008, 1:02 pmFestival Of Frugality Favorites » Your Finish Rich Plan:
[...] Free Is Almost Never Free at Save And Conquer. It’s so true! Almost all the stuff that gets passed on to us as free, their cost is built into what we DO purchase. It never ceases to amaze me that people’s good sense flies out the window when making purchases, just so they can get something else for “free”. Must Read! [...]
18 April 2008, 5:18 pmPersonal Money Tips » Blog Archive » 10 Everyday Tips to Save Money:
[...] Free Is Almost Never Free [...]
25 April 2008, 3:46 am