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Black Friday is nearly here, and Neil Bage, a behavioural economics expert and director of behavioural insight at Be-IQ shares his six tips to avoid getting ripped off on the day.
Shoppers will spend billions of pounds during the Black Friday and Cyber Monday sales. But you should remember that retailers use a host of tricks to encourage you to buy when it may not be the best deal.
These behavioural nudges risk costing you money that you might not be able to afford to spend.
Here are my six insights into behavioural economics to avoid those Black Friday traps.
1. Anchoring. Deciding that something is a deal based on a reduced price point, without considering if you’re still getting real value for money.
2. Regret aversion. Buying things on Black Friday because of a fear that, if you don’t buy them now, you may never get an opportunity like this again.
3. Percentage neglect. The general inability of most people to accurately calculate percentages, especially ones that involve subtraction.
4. Restraint bias. Over-estimating your ability to show restraint in the face of a bargain, even if the thing you’re buying isn’t something you really need.
5. Loss aversion. Black Friday is a ‘flash sale’ and if you don’t act now, the offer will be taken away. The fear of losing out on the deal has an incredible pull.
6. Hyperbolic Discounting / Present Bias. It’s all about today. The bargains may not be around in the future, so you can’t wait. Plus, that immediate gratification feels really good!
To learn more about behavioural economics and other behavioural insights in everyday life, check out Neil’s podcast, the Bitesize Behviour Podcast. You can listen on iTunes, Spotify, Stitcher or Soundcloud.
Neil Bage is the chief behavioural officer at Murphy Wealth and the founder of behavioural insight’s fintech company Be-IQ. He is a specialist on the sub-conscious behaviours that drive our decisions, and has a reputation for bridging complex scientific theory with real-world understanding and application. As well as being a keynote speaker, Neil is also the creator and host of the Bitesize Behaviour Podcast.