Have you ever wondered why scoring a discount on a purchase is so exciting?
Although shopping holidays like Black Friday or Cyber Monday can make headlines for the sales offered on hot-ticket holiday items, there are other times throughout the year when shoppers might come across a deal.
Coupon tracker RetailMeNot conducted a survey in 2018 to learn more about how sales, coupons and deals impact consumer spending behavior. Some of the key insights include:
Before heading off on an exciting bargain hunt, learn more about the psychology behind the excitement around discounts and how to be a savvy shopper who doesn’t fall for hype or sales tricks.
Will Buying Experiences Instead of Things Make You Happier?
While you could make a whole career out of studying the brain and human behavior, there is one neurotransmitter you should know about when it comes to shopping: dopamine.
Dopamine is a big part of our brain's reward system – When dopamine is released, people experience pleasure and satisfaction. When we feel negative emotions like stress or fear, the brain wants to return to safety and uses dopamine to calm itself down.
There are several activities that can trigger a release of dopamine in your brain. Shopping itself is a known trigger, and experts have found that sales also trigger dopamine release. The bottom line? Our brains are wired to feel great when we get a discount while we shop.
The Psychology of Money: Why Money Elicits Emotion
Those who want to make a big-ticket purchase – like a new TV or computer – may spend more time saving and looking into options, including sales, offers or other deals. Depending on their financial situation, the buyer may feel negative emotions like guilt or shame when spending a significant amount of money. Whether it helps with rationalization or it’s due to dopamine release, coupons or discounts help to alleviate negative feelings.
PRO TIP: If you’re budgeting for a big ticket item and are able to purchase it on sale or with a coupon, you may get excited by the “found” money that was intended for that purchase. Taking the money you saved and investing it into your 401(K) or putting it aside in a savings account can help you reach your financial goals faster.
Because our brains crave dopamine when feeling emotions like stress or fear, it’s prudent to pause before making a purchase and consider what you are buying and if it is worth the price you are paying. We’ve all gone to the store for one thing and then been distracted by flashy deals and spent way more than we intended. Taking that mental minute can give you clarity around what you’re buying that your wallet will thank you for.
Another strategy buyers may use for big purchases are payment plan options like Buy Now, Pay Later (BNPL). Because it allows the instant gratification of a big purchase without shelling out the money all at once, BNPL can be enticing to shoppers. Be sure to fully consider the pros, cons and implications of BNPL before completing a purchase.
What You Need to Know About Buy Now, Pay Later
Advertising often uses urgency messaging like “Hurry this deal won’t last,” or companies may introduce a scarcity component, like limited supplies of a particular item. This tactic is aimed at provoking fear to propel sales. It can be easy to get swept up into the hype and end up with a purchase you may regret. Before you add the item to your online or physical shopping cart just because of the deal countdown timer, take a beat to really think through the purchase. This will help to prevent buyer’s remorse.
At Rockland Trust, we want you to be empowered to take on your finances, from planning for milestones to everyday purchases. Our Learning Center, No Shame in This Money Game and Mini Money Minutes podcasts, and other educational tools are here to support you in learning about a variety of money-related topics.
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