Some sales are real. PriceSpy recorded a price drop across its index of -6.52 per cent on one major sale day last holiday season compared to a typical shopping day. It may not sound like much, but it’s significant when the many thousands of items in the index are counted, says Matinvesi-Bassett. Nearly half of all products on the site were reduced for that sale.
“While most retailers strive to provide genuine savings, our research consistently uncovers instances of fake sales. In these cases, prices are inflated before a sale event and then labelled as discounted on the sale day.”
Research following last year’s holiday season found as many as 15 per cent of deals on Black Friday were in fact fake sales. That was up from 8 per cent in 2020 and 11 per cent in 2021.
Examples of fake sales included the PlayStation 5, which last holiday season was selling in November at retailers such as JB Hi-Fi and Noel Leeming for $899. Prices rose to $1199 through to December 17 or thereabouts, then fell to $899 again, which must have looked like an amazing sale. In April, they fell to $734. In September, the price was $718, then back up to $859 in October this year.
PriceSpy has a long list of other such fake sales from last year. Examples include Bose’s Noise-Cancelling Headphones 700, JBL’s Xtreme 3 Bluetooth Speaker and several Oppo phones.
Many products prices start climbing in October, just in time for a Black Friday “sale”, then after a brief fall for the sale days, they jump up again throughout December before being reduced again from December 23 or Boxing Day. Sure, you’re paying less on Boxing Day than in mid-December. But that doesn’t mean you’re getting the best price.
When they create fake sales, retailers are taking advantage of a behavioural economics concept called anchoring.
When we fall for anchoring, we base decisions on the first piece of information we receive. This initial high price serves as the anchor, and we are led to believe we are getting a great deal when the fake sale price is presented as significantly lower.
What’s more, the urgency and excitement of getting a seemingly excellent deal can lead us to buy things we don’t necessarily need or haven’t thoroughly considered purchasing.
Anchoring is like a magic wand that makes us pay more and encourages impulse-buying.
As well as fake sales, PriceSpy’s product index records many prices that are simply raised on major sale days.
For example, 16 per cent of prices were hiked for Black Friday last year to catch the people who assumed they would get a deal. Sometimes you’ve decided to buy something, and when it’s not cheap, you have a WTH moment and buy it anyway.
“Our ongoing research continues to highlight why it remains imperative for shoppers to approach major shopping events, such as Black Friday and Boxing Day, with a discerning eye,” says Matinvesi-Bassett.
“While it’s clear there are great prices to make the most of, consumers need to conduct thorough pricing research to ensure the price they are being offered is genuine and worthwhile.
“This research can help determine the actual value of a discount and whether a price is comparatively higher or lower.”
Finally, the best bargain is often the one you don’t buy. Maybe set yourself a rule of not buying things until a month after you first get the urge. Sometimes that urge simply goes away.
