This is how retailers get you to spend more money

As shoppers prepare for Black Friday and the holiday shopping season, it’s easy to find themselves racking up debt that will weigh them down well into the new year. So it’s worth it for consumers to know some of the tactics retailers use to get them to buy.

For example, most offers that offer savings in the form of free shipping or a free gift over a certain amount won’t save you money. The practice, called “spaving”, or spending more to save rarely benefits consumers, according to personal finance experts.

“I understand the appeal of going to checkout and a notification pops up saying you have to spend $10 more to get a bonus,” Jacob Channel, senior economist at LendingTree, told CBS MoneyWatch. “But 90% of the time when you break it down it doesn’t make sense. You don’t really save money if you spend more of it.”

According to the US Public Interest Research Group (PIRG), a consumer advocacy group, these are five tactics retailers use to get you to spend more.

Creating a false sense of urgency

The fear of missing out on a good deal can lead consumers to make impulse purchases. Although some offers are actually only valid for a limited time, US PIRG identified a number of sellers on Etsy, an e-commerce site for independent crafters, who were using fake countdown clocks for offers that never expire.

According to a PIRG study, 80% of the top 20 best-selling products on the deal countdown timer site simply reset when their ticker reaches “0.”

“The ‘limited’ window may not be as limited as it sounds, and the deals may not be as good as they seem,” US PIRG’s RJ Cross told CBS MoneyWatch. “Make your list, compare these items, and don’t get distracted by deals you haven’t had time to think about.”

Implies scarcity

Online retailers may mark products as “selling fast!” or, when a consumer is considering a purchase, show how many other consumers are browsing the same item.

“Retailers and advertisers are always trying to get you to buy more than you need and spend more than you want,” Cross said in a statement. “Once you know what to look for, you end up laughing when you see these tactics instead of engaging in them.”

Pricing tricks

Have you ever wondered why a price is $4.99 and not just $5? When sellers round down the price of an item, it signals to buyers that it is cheaper, PIRG notes. Although $4.99 is just a penny less than $5, a buyer is more likely to fixate on the dollar value – $4 – than the cent number.

According to PIRG, even removing a comma from a high sticker price like $1,200 and displaying it as $1,200 can entice someone to pull the trigger. Meanwhile, breaking up the cost of an item into monthly installments can also make the price appear lower than it actually is, the organization noted.

“You still have to pay the full cost and sometimes even more late fees if you’re not careful,” Cross pointed out.

Dubious testimonials

Many retailers feature testimonials online, supposedly from customers raving about a “life-changing” vacuum cleaner or a pair of sweatpants. Some of these accounts come from real customers, while other reviews are not trustworthy because they were generated by a bot or the company itself, PIRG said.

Essentially, it’s a form of peer pressure: buyers are subtly tricked into believing that purchasing the product will make them as happy as the happy customers portrayed in the review. In reality, many online reviews are fake, especially with the proliferation of AI bots.

“When you look at reviews of a product, you shouldn’t necessarily take the star ratings for granted. Instead, look through the comments and find the ones that seem genuine – that either include a picture of the product or make a specific statement about the product rather than a general comment like “Great product!” recommends Cross.

Appeals out of fear

Many marketing pitches and advertisements suggest that if you don’t make a purchase, your life will somehow become worse, from the risk of burglary to hair loss. Of course, in e-commerce, such messages are tailored to your individual interests and preferences, as website cookies share your browsing behavior with retailers.

Messages “about how to fix our perceived shortcomings are increasingly reaching us any time of day we go online,” Cross said.