Why We Love Discounts So Much
In a modern cartoon, a character shouts to his friend: “It’s so-o-o cheap... almost free! Let’s run quickly, or they’ll eat everything!” After laughing at the scene, it's time to think—why do we really love
various discounts and coupons? And how can we resist them?
What Are Discounts?
Everyone knows what discounts are. They offer products at a lower price. Discounts come in various forms: bulk purchases, seasonal sales, trial batches, loyalty discounts, early payment, cash payments, store cards, etc. Sometimes prices are reduced to attract buyers, known as dumping. There are also simple discounts used to sell off slow-moving goods to make room for new inventory.
To have a noticeable effect, a discount needs to be appropriately sized, balancing the interests of both buyer and seller. Too small, and it’s “uninteresting” with meager results. Too large, and the store loses significantly. The initial cost should be considered, as it becomes inflated with subsequent markdowns. Discounts are most effective on goods with elastic demand (delicacies, jewelry, electronics, furniture, etc.), where price changes proportionally affect sales volumes. In contrast, inelastic goods (necessities, cheap items, everyday goods) yield less benefit from discounts.
Why Are Discounts So Attractive?
The main task of a prominently displayed discount is to attract attention. This first step is crucial because most people don't plan to buy something at a discount when they leave home. However, seeing a lower price makes them think, “Maybe I should get this?” The desire to save is natural for most of us.
From a neurophysiological perspective, discounts have been well-studied. Researchers at Claremont Graduate University found that receiving a discount coupon increases heart rate and oxytocin levels (the “cuddle hormone”), deepens breathing, and makes people feel 11% happier. Harvard Business School studies also show that when people see discounted prices, rational thinking fades, replaced by the pleasure of the purchase. Instead of asking, “Do I need this?” or “Do I like this?” people focus solely on the reduced cost, which drives them to buy.
Rutgers Business School marketing professor R. Schindler believes the cognitive processes triggered by discounts are similar to those when someone finds a bill on the ground and picks it up. These processes belong to the compulsive group, where people feel compelled to act in certain situations to avoid anxiety. This explains why sales volumes on Black Friday are 715% higher than normal days, as per Bambora's data. Neuroscientist K. Elger states that only 4% of people can think rationally when faced with discounts.
Specific Motives for Buying Discounted Goods
Several specific motives drive people to buy discounted goods:
- Western Lifestyle Influence: Foreign films promoting high living standards make it seem prestigious to buy quality items at lower prices during events like Black Friday.
- Desire to Save Money: This isn't just about low-income buyers. It also affects middle-income and even wealthy people, creating a new social stereotype—“the fashion to save money.”
- Feeling Smart and Lucky: Buying a good thing at a discount makes people feel clever and fortunate, boosting their social status when they share their successful purchase with friends.
- Club Cards: Owning a club card makes people feel part of a privileged group, enjoying special treatment and better shopping conditions.
- Reduced Regret: Buying discounted items reduces regret about spending money on something unnecessary.
- Fear of Missing Out: Time-limited discounts create a fear of missing a good deal.
- Pleasure from Discounts: People enjoy the feeling of getting a good deal and seek to experience it repeatedly.
- Perception of Wealth: Surprisingly, many people believe they become richer after buying discounted items.
No one is immune to the allure of discounts, often leading to spending more than planned.
How to Resist the “Magic of Discounts”
To counteract the allure of discounts, consider the following:
- Think Before Buying: Focus on whether you need the item right now and if it’s worth the money, regardless of the discount.
- Assess Quality: Ensure the item fits well and is of good quality. If not, ignore the “only today - 20% off” sign.
- Prioritize Durables: For durable items like refrigerators, TVs, or laptops, remember that the saved money will be quickly spent. Choose based on features, not discounts.
- Take a Break When Shopping Online: After filling your cart, take a break before paying. Go for a walk, have a snack, then revisit your cart with a fresh mind. You’ll likely find many items unnecessary.
By following these tips, you can avoid the pitfalls of discounts and make more thoughtful purchasing decisions.
