How Does a Consumer Know Whether a Purchase May be a Good Deal?

As the saying goes, “When the deal is too good, think twice”. We are often bombarded with endless promotions, deals, and other similar marketing tactics, which may prompt you to ask yourself: Is this really a good deal?

Any seasoned marketer can confirm that consumer psychology plays a powerful role in how we perceive value when making purchases, both online and offline. We tend to override logical thinking when it comes to flashy discounts.

Research strongly suggests that emotional spending is linked to dopamine release — dopamine is a neurotransmitter associated with excitement. As such, retailers often use psychological tricks to make deals look appealing to the target consumer.

So, to help the consumer know whether a purchase is a good deal or part of a marketing gimmick, this write-up explores the tricks used by retailers to compel you to buy and how you can evaluate deals wisely, and actually score the best deals online. Keep reading this article about “how does a consumer know whether a purchase may be a good deal”

What Research and Experts Say About Consumers’ Buying Criteria

Buying criteria are the factors or standards the customer considers before making a purchase. This includes cost, quality, product features, and what people think about a brand. In most cases, buyers think of price first before considering the other factors.

According to research titled “Effects of Time Constraints on Consumers’ Judgments of Prices and Products“, referencing the Journal of Consumer Research (Monroe, 2003), we tend to equate higher costs with higher quality, even when product performance is the same.

Moreover, a study published in ScienceDirect says that scarcity marketing can significantly increase the likelihood of the target consumer buying due to the fear of missing out (FOMO). FOMO is based on a phenomenon known as loss aversion, which is a cognitive bias suggesting that individuals feel twice as much pain of losing as the pleasure of gaining.

Psychological Pricing Tricks Used by Retailers

The primary goal of clever marketing is to encourage the target consumer to spend. As such, retailers and advertisers use the following pricing tricks to capture your attention:

1.    Anchoring Effect

Anchoring effect is a cognitive bias that suggests we tend to rely heavily on the first piece of information we receive when making purchasing decisions. In essence, we see the initial value as a reference point. As a result, subsequent judgments are swayed.

For instance, a marketer may post that they were selling a bag for $300 (even though it was never actually worth that amount), and after a discount, the same bag now costs $200. Of course, $200 will feel like a bargain because you are not evaluating the comparison objectively. You are basing your judgment on the anchor. In essence, it involves artificially inflating original prices, then offering discounts to make deals look more appealing.

2.    Urgency and Scarcity Messaging

Fear of missing out (FOMO) leads to impulse buying. Phrases like “only 2 items left”, “offer ends in 24 hours”, and “exclusive offer just for you!” are meant to pressure you to act quickly. See, we tend to value things when they seem rare, and as stated earlier, we fear losing an opportunity more than the value of gaining something of equal worth.

3.    Decoy Effect

This cognitive bias in consumer behavior is also known as the asymmetric dominance effect. It suggests that if an individual is presented with two choices from which to choose, their decision can be significantly influenced if a third, seemingly less attractive option is introduced.

So, you’ll be offered two main options, such as a 300ml juice for $3 and a 600ml juice for $7. In this case, you might hesitate to spend $7 on the larger amount. However, when a third 450ml option costing $6.50 is introduced, the large option will seem like a much better deal than the medium, even if the price is almost as high as the large option.

In that case, just know what you actually need because this price structure will always be there to manipulate your purchasing decision.

4.    Herd Mentality

It’s also known as the bandwagon effect and is deeply rooted in the phenomenon called social proof. We tend to follow what the multitude is doing rather than make independent decisions.

See, a lot of inflated and fake customer reviews make us assume that something is a good deal. Advertisers use this cognitive bias to drive demand, build trust, and ultimately influence purchasing behavior. Unfortunately, even 5 star reviews can be manipulated, so beware.

How to Know Whether a Purchase is Actually a Good Deal

The truth is that, in most cases, what we perceive to be a good deal is a combination of real value and psychological manipulation. But with so many choices, how can you determine if a purchase is indeed a bargain? Here’s how.

1. Compare prices across multiple stores: There are several price comparison websites and tools that you can go to. This includes CamelCamelCamel, Google Shopping, Become, ShopSavvy, and Shopzilla. The goal is to confirm the historical prices of products over the weeks or months.
2. Read real customer reviews and check expert opinions: You’ll be able to unearth a lot of red flags by reviewing what customers and experts are saying about a product. Since we live in the age of fake reviews and paid promotions, go to sites such as consumerreports.org, CNET Reviews, and social media forums like Reddit.
3. Assess the value you’d get: Does the product meet your needs as an individual? Ideally, a cheap product is a bad deal if it is of poor quality or a counterfeit.
4. Beware of hidden costs: Extremely low prices may come with extra costs such as shipping fees, subscription, and maintenance costs. Also, check if the product has a warranty and return policies. All these traps signal that a product may not be a good deal after all.

Final Thought

A good deal is not just about the discount you’d get. It’s a question of whether that product is actually worth the price for you as an individual. Does it meet your needs, align with your values, and fit within your budget?

We strongly advise you to always slow down, take time to compare prices, and think critically whenever you want to get that great deal that seems so elusive. Doing this will help you steer clear of clever marketing manipulation and actually save on products.

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