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  • Santa under mind control? Credit card debt could tell the story.

    Santa under mind control? Credit card debt could tell the story.

    by:
    Laurie Campbell

    Here’s a question for all you Santas out there, male or female, as you go about shopping this holiday season. Are you being mind controlled by retailers who use subtle psychological tricks to get you to spend more than you should on gifts and goods? That might be the case. Your credit card debt come January could tell the story, with Christmas bills often doubling or even tripling. According to studies, millions of us fall prey to under-the-radar sales techniques that encourage us to overspend at this time of year – and for that matter at any time of year.

    Let’s explore some of these head games.

    • Pennies and dollar signs – they’ve got your number. To start, two of the oldest tricks in the consumer psychology book come to mind. The first involves a one-cent discount on an item’s rounded-out price tag from say $50 to $49.99. The missing penny apparently makes goods seem more affordable. Nuts to that, I say, for any item that is not already on your Christmas list. The Canadian penny is no longer considered currency anyway. Always round out prices and stay in focus to comparison shop. Meanwhile, the second trick is at work when you see, say, a 99.99 dollar price tag without the “$” sign in front of the numerals. The missing sign seems to make the price seem even more palatable. Double nuts to that - 100 dollars is $100, period.

    • Cheap items off the top; expensive lessons later on. Retailers call them “open-the wallet-items.” These are things like half-priced socks, chocolates, etc. that greet you in a bright display as you enter a store. The idea here is to break psychological barriers to spending, making for more impulsive shopping – and for more credit card debt problems down this wintry, slippery slope. Start smart when you enter a store. Make a beeline for only the items you’ve planned ahead of time to purchase.

    • Sweet, free goodies can soften your resolve. Speaking of chocolates, a study by The Journal of Consumer Research showed that free treats from retailers can significantly soften your resolve to keep your spending in check. I guess the goodies work on the brain like some sort of drug. Eat a chocolate, candy, or perhaps a pastry offered by a store and you open yourself to buying lots of stuff maybe you shouldn’t be buying, including very costly items such as gold jewellery, designer duds, electronic gadgets, you name it.

    • Tricky displays can magically open wallets. Another frequent mind trick by retailers – the “compromise price effect” they call it. For instance, a store will put a higher-end Polo Ralph Lauren jacket for $250 next to a lower-end Kenneth Cole jacket very similar in design for $175. Suddenly, shoppers are tempted to fill Kenneth’s coffers thanks to what appears to be a good buy. This tactic works both in stores and in online shopping, research indicates.

    • Accessories to a crime - don’t break the law. The law for wise holiday shoppers is to always keep to a carefully thought out Christmas budget with a full list of items that you put in writing. You will be tempted to break the law. Sales people with friendly words and big smiles can be very crafty at getting you to overspend. They will entice you with accessories - the cool case for the new cell phone; the smart shoulder bag for the new computer; the colourful scarf for the new sweater. There is always one more thing in the old “sell-the-customer-up” game. Don’t buy it.

    • Getting touchy-feely with the merchandise. Plenty of studies show that once you touch a store item, you’re far more likely to buy it. Make a run for it if a sales person encourages you to grip something that’s a pure extra.

    • The lure of the treasure hunt and big savings. You’re in a store shopping and you see a poster or maybe hear an announcement over the public address system. Big savings are yours to enjoy regarding items in a certain department, in a certain aisle, or in big basement bins. Suddenly you are lured by the thrill of the treasure hunt for great buys. But, as I say, all the digging is only permissible if the item already is on Santa’s list.

    • They can put a spending spell on you. The Christmas spirit also can come with witchery of sorts among stores and sales people. Many stores carefully engineer their shopping atmospheres. For instance, research shows that one retail chain increased oven and fridge appliance sales by 23 per cent after introducing the smell of fresh-baked apple pie into stores. A sports chain sold more expensive sneakers simply by making sure there was plenty of distracting noise in its stores (go figure). Meanwhile, in the wake of other studies, stores are teaching sales staff ways to discreetly touch customers and mimic their movements, behaviour that apparently loosens up wallets. Rather creepy in my view.

    • Free shipping that comes with strings. Free shipping may seem like a great deal, but invariably it comes with strings attached. You have to pass a certain spending threshold at the store before the deal applies. It’s a gimmicky way to get you to spend more, which will only add to the post-Christmas blues involving too much credit card debt.

    In a Yuletide nutshell, be mindful of all spending this holiday season.

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