Sneaky sales tactics by retailers have been revealed. Photo / 123rf
Sneaky sales tactics by retailers such as ramping up prices before a sale and higher prices for gender-based products have been revealed.
Consumer NZ is collecting examples of “fake specials” for its supermarket campaign, which will see misleading advertising presented to the Commerce Commission. One example is instances of multi-buys which were actually the same price as if you bought the same number of items individually.
So far shoppers have sent Consumer NZ hundreds of examples of unclear and misleading promotions so the consumer watchdog can hold the supermarkets to account. The information will be presented to the Commerce Commission next month.
It comes as price comparison website PriceSpy has uncovered strategies they say retail stores use to get shoppers to buy more.
This week PriceSpy released to the Herald on Sunday the top tactics consumers needed to be aware of when shopping.
Liisa Matinvesi-Bassett, New Zealand country manager for PriceSpy, said retailers were constantly running promotions and sales to encourage shoppers to spend.
“Sometimes these offers are great and deliver sizeable savings. However, our research shows some ‘deals’ are not all they seem.”
Gender-based pricing and the “pink tax”
Shavers with a floral design that are more expensive than those nearly identical in blue, or the exact same sweatshirt or style of shoe but with a vastly different price depending on gender, are often slapped with a “pink tax”.
PriceSpy found the same Under Armour Rival Fleece was $59 for women and $49.99 for men - making them 18 per cent more expensive for women.
The Nike Air Zoom Structure 24 shoe for women was $172 and for men it was $154 - 12 per cent more expensive for women.
The Hoka One One Clifton 8 shoe for women was $191 and $179 for men - 7 per cent more expensive for women.
Matinvesi-Bassett said shoppers needed to be more open-minded to save money on similar products despite how they are marketed or branded.
“Compare men’s, women’s and unisex versions to see how different they really are, and then which is cheapest.”
In a recent column, Herald on Sunday Consumer Watch columnist Diana Clement agreed, saying “razor blades are razor blades, whether they’re cased in pink or blue plastic”.
Clement points out the “pink tax” is also prevalent in the service industry, with an example of $89 for a women’s short-hair cut and blow wave, compared with $49 for men.
At a local dry cleaner, she found it was $15 for a woman’s blouse and $6 for a man’s shirt.
Rollercoaster pricing
This is when a retailer gradually hikes a product’s price before suddenly dropping the price, and then advertising a discount based on the previous highest price.
This is sometimes referred to as a “fake deal” and is especially common around big shopping periods like Black Friday, Cyber Weekend and Christmas.
The issue is so prevalent and costly that countries such as Sweden and Finland have passed legislation to protect consumers from strategies such as rollercoaster pricing.
Matinvesi-Bassett said being aware of an item’s price history was the first step in not falling for the rollercoaster pricing strategy.
“If you have an item that you’re looking to purchase, first be sure to check out the item’s price history information, to see what its average price is, so that you can be mindful of sudden price increases.
“Comparison services, like PriceSpy, offer price history information for free across thousands of products and retailers.”
Yo-yo pricing
This is when retailers put prices up and down at regular intervals - sometimes every few days or weeks. Prices are lowered to boost sales and then suddenly increase again. Retailers brand these as “flash sales” or “one day only” offers.
Matinvesi-Bassett said this tactic relies on the consumer believing they will never get that same rock-bottom price again. Spoiler alert - you will.
To avoid being lured in, Matinvesi-Bassett suggests setting up a price alert for the item you are looking to buy on a price and product comparison site.
“Then you can automatically get notified when a product drops in price to a level that you’re happy to pay,” she said.
Bundle pricing
When items are offered in a package or as buy one, get one half-price, it’s often because retailers have surplus stock.
Sometimes there is a genuine discount but in other cases, the price of the main product is hiked up to account for the additional “freebie” or the discounted second item.
Matinvesi-Bassett warned shoppers not to be blindsided by this tactic.
Ask yourself: “Do you need, or even want, the additional product? If not, it’s not worth buying this bundle.”
If you do want it, check the price and make sure you can’t buy it somewhere else individually for less.
Pressure pricing
Causing customers to panic-buy because of phrases such as “only one remaining” or “last chance to buy” is another tactic used, Matinvesi-Bassett said.
More often than not the product is available at other stores - sometimes for a better price.
Checking the PriceSpy app for a certain product brought up all the retailers stocking it, its availability, and the price, she said.
Supermarkets used the same tactics to get shoppers to spend more, said Jessica Walker from Consumer NZ.
She said they were still collecting evidence for their supermarket campaign, in which eagle-eyed shoppers have sent hundreds of examples of so-called specials that are not so special at all.
There were plenty of examples, from multi-buys which were the same price as the same number of individual items to specials where just one cent was removed.
Walker said supermarkets were particularly good at laying stores out to get shoppers to go from one end to the other to get the basics.
“It’s no coincidence that you have to traipse the length of the store to replenish your bread and milk,” Walker said.
She said other tactics to be aware of included placing more expensive brands at eye level, with the budget options lower down.
“Manufacturers want their brands in the best possible position and pay to enable this to happen,” she said.
“If you’re looking for pocket-friendly alternatives, you may have to crouch and scour the lower shelves.”
End-of-aisle displays and checkouts were a haven for things you didn’t know you needed.
“There’s a reason these products are placed where they are,” Walker said.
“It’s because you’re more likely to buy them.”
A spokesperson for Foodstuffs, which owns Pak’nSave and New World, said the layout was more to do with how customers liked to shop.
The numbers are in - it's time to check your Lotto tickets.