That Big Discount – Why Sales Aren’t Really Sales

Written by Amanda Boehm-Garcia   // May 31, 2011   // 5 Comments

By Keo101

I have to admit that one of my guilty pleasures is shopping. But to really have a satisfying shopping experience, my purchases should be on sale. Not just 20% to 30% off, but 50% to 75% of the suggested retail price. The thrill of getting my desired purchases gets the endorphins going and I am on top of the shopper’s mountain! Nothing can get me down…except that I still have less money than I did before walking into the pearly gates of my beloved, friendly retail stores. Tricked to part with my hard earned dollars again; drat, curses and balderdash!

Over the last 3 years, the huge sales that have become widely available are the only benefit to a recession that has crushed every industry in the states.  Although many stores have closed, there are still a multitude of retail stores that have made it through the tough economic times and have had some killer sales. Seriously, amazing sales that I know I haven’t been able to walk away from.

Let’s agree that many of the fine pieces of clothing or other items for sale that are available in stores across the nation were probably made in factories, in third world countries. So the actual cost of making garments, toys or  say wooden boxes with fine Batik style painting might be $5 (includes shipping and handling!) for the manufacture. Then we see said Batik style wooden box for sale for $20 in the states with a statement like “Fine wooden craftsmanship” or “paint hand made from crushed berries and twigs” or even “constructed by orphan with one leg”.  We don’t even consider that the retailer has marked up the price 300%.

Many people read scintillating statements like this on the product and are instantly suckered into a purchase. A purchaser also feels like they have contributed to an ancient culture that struggles to exist in today’s modern, fast-paced society. We just think about the poor one-legged orphan that was making paint to put on the box and how culturally in tune it will make our living rooms look.  In reality, we keep the giant third-world factory going and producing more noxious fumes into the atmosphere, while its employees are forced to use their scripts at the over-priced company store for rice.

What if this fine Batik box goes on sale? Let’s say the $20 box is on sale for 50% off and we must buy the box for $10.  We think the one-legged orphan still benefits from our purchase…although it may just be with more script to the company store and a wooden leg on layaway. We probably feel good about making a purchase to help contribute to our third world friends, but even better is that we feel like we got a bargain! People feel satisfied with the knowledge that they did not spend nearly as much on this kitschy decorative piece to clutter their home. The question remains, did we get a good deal? Is this sale really a sale? In reality, the retailer can still get a 100% profit from your lovely Batik box that you got “on sale”. This strategy is often referred to as cost-plus pricing in the retail world.

Truth be told, even when we spend money for items on sale, we aren’t really saving any cash. You are still spending money, even if it’s not as much as you originally planned. When we spend money on items that have a reduced price, we still spend, period.  Even if your purchase helps benefit someone abroad or it simply fills the coffers of a company stateside, your good fortune becomes their fortune.

This certainly doesn’t mean we should all stop buying things on sale. Being conscientious about your purchases is a good quality to possess and should always be a part of your smart-shopper strategy. I recommend using coupon related sites such as Coupon Sherpa to help further the amount of money that you won’t use when making your purchases.


5 COMMENTS

  1. By Tax-y Lady, March 28, 2017

    I remember back in my undergrad macroeconomics and microeconomics classes how my classmates were misconstruing the idea of availability and how it affects price. As availability increases, price should decrease. And as availability decreases, price should increase since it is a less common resource. OK- that works for things like food or gasoline/oil. And it may work for collectible items or artwork. But it doesn’t work for that “high fashion” T-shirt at the mall that no one is going to want to wear come next season. Some things lose value over time, regardless of availability. Like Dollar Shark’s batik box, a sale is only a good value if you want or need the item you are purchasing. But if you want or need the item enough, you would potentially be considering buying it even if it wasn’t on sale. Maybe that is a better marker for making purchases- would you have bought this if it wasn’t on sale? I admit to sometimes going against my own advice- and buying something that I feel wasn’t worth the original $40 retail price, but is worth the sale price of $20 to me.

    Reply
  2. By Sammy, March 28, 2017

    I get motivated to shop only if the discount is above 75% Also, I am a big coupon-clipper, I try to shop for items that’s on the coupon list to bank couple of dollars.

    Reply
  3. By Mark Chen, March 28, 2017

    Most of us buy stuff we don’t need. The sale markdowns are used as by merchants to get influence us to buy. The best way to save is to shop around after you decide you need something, not buying something because it is marked down.

    Reply
  4. By dolrdolrbill, March 28, 2017

    Online coupon discounts have been gaining steam. Goldstar is a great site for entertainment and Groupon is another great resource for sales. I had not heard of Coupon Sherpa: thanks for the heads up.

    Reply
  5. By John Dough, March 28, 2017

    Some sale purchases are definitely a great deal if you were planning to buy them ahead of time. If you do not need to stay ahead of the fashion trends, clothing budgets can be stretched considerably by the use of sale and clearance racks. As a former worker in the retail industry, I am quite aware of the retail mark-up. A savvy consumer can blur this line with sales, coupons, discounts, clearances, and even timing. Get to know the salespeople at your local retail store, they are a good source of information for when a store is getting rid of their seasonal items to make way for the next big thing. I agree with Tax-y lady that I sometimes do not heed my own advice if there is a particular item I want, but the cost is defrayed by my constant frugal nature.

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