OUT OF MIND, OUT OF POCKET: THINKING ABOUT A SALES GIMMICK CAN SAVE MONEY

FAYETTEVILLE, Ark. - Twenty percent off, two-for-the-price-of-one, free gift with purchase ­ when do such sales ploys work? Just in time for holiday shopping, a new study by the University of Arkansas department of psychology shows that the amount of thought consumers put into a purchase can determine whether sales gimmicks sway their decision to buy.

According to the article "Mindfulness Limits Compliance with the That's-not-All Technique," published in the current issue of the Personality and Social Psychology Bulletin, the amount of thought that consumers devote to a purchase is directly related to the value of the item they are buying. Items of low cost are bought with little forethought while more expensive purchases are preceded by greater consideration.

"Our conclusion in the study was that, when people have the motivation to treat something mindfully, they're not as susceptible to sales ploys," said Eric Knowles, professor of psychology and author of the article. "If an object costs a trivial amount, consumers don't think about it as deeply because they're not motivated by the interest of conserving money."

To test the effectiveness of sales gimmicks, psychology students sold boxes of chocolate on the University of Arkansas campus. Consumers could choose between a small box of chocolate, costing $1, or a large box, costing $5. Some consumers were told the flat price while others were pitched a gimmick price in which the $1 box had been reduced from $1.25 and the $5 box had originally cost $6.50.

The psychologists found that 31 percent more people bought the small box of chocolate when they heard the sales gimmick. However, the gimmick price of the large chocolate box had relatively little impact on sales. According to Knowles, $5 was enough to motivate consumers to think before they bought, thereby rendering the sales gimmick less effective for the large box of chocolate.

The next stage of the study sought to confirm the presence of thoughtfulness in consumers. Regardless of which box the consumer was interested in buying, the psychology students offered each customer one of two explanations for why the chocolates cost so much. Some consumers heard a valid explanation: "These candies are fudge, hand-dipped in chocolate, with pecans." Others heard a useless and redundant statement: "These candies are made of chocolate and sold in this box."

The study found that consumers who were interested in the small box bought the chocolate, regardless of whether they heard the valid explanation or the useless one. "The fact that people allowed good and bad explanations to be equally persuasive for the small box indicates that they gave less thought to the purchase," said Knowles. "This same fact ­ their lack of consideration ­ enabled the sales gimmick to be persuasive."

In the case of the large box of chocolates, however, sales increased only when accompanied with the valid explanation. The fact that consumers distinguished between good and bad explanations indicates that they devoted some thought to their purchase.

According to Knowles, retail stores know that sales gimmicks work on a practical level. They employ that knowledge by stocking impulse items near the cashier or by advertising sale prices next to the original cost.

But knowing why the gimmicks work can help consumers protect themselves from unplanned purchases and overspending. "Think about even the most trivial purchases," Knowles advised. "It's clear these sales techniques are effective, but they're most effective when we're not paying attention."
Knowles sees a further application for this study's findings within the field of finance counseling. "Every financial advisor advocates planned spending," he said, "But now people in debt, people who chronically overspend, have a weapon against their own impulses. It's not just planned spending. It's thoughtful spending."