You know the saying, “If it’s too good to be true, it probably is?” Well, CBS Money Watch contributor Farnoosh Torabi proves that adage true by blowing the lid off some of the most common retail scams. She explains why “specials” like “Buy One, Get One Free” or “5 Items for $5” are not quite the bargains retailers want you to think.
“You don’t just walk into a store and see something for 99 cents and say ‘This is a steal,’” Torabi says. “There is a science behind this in most cases.”
Being aware of sneaky tricks will help you hang onto your cash.
One of the big ways retailers fool shoppers into spending more is by using “charm prices.” Torabi explains that when the price of an item ends in 99 or 95, like $7.99, we are conditioned to think it’s a deal or a bargain. And oddly enough, studies have proved that more people will read that price as being $7.00 and not the $8.00 it’s much closer to.
Similarly, by limiting the amount of products per customer retailers increase adrenaline and cause shoppers to spend more money to snag what they perceive as a limited-time deal.
So how can you outsmart retailers and get the most for your money? Farnoosh offered up the following smart-shopping tips during her visit on “The Early Show”:
- Shop and dine with a calculator
- Shop with cash, especially big bills
- Ask yourself: Would this appeal to me at full price?
- When in doubt, distance yourself for 10 minutes
Farnoosh Torabi is a personal finance expert, author and TV personality.