"PRACTICAL WORLD" - 'TRUE NEWS' MAGAZINE.

"PRACTICAL WORLD" - 'TRUE NEWS' MAGAZINE.
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Practical World True News Magazine

#BlackFriday : Black Friday’s deep discounts: The folly of frugal shoppers.

We all have a "penny-pincher" or "cheapskate" in our family or friend circle--the kind of person that never offers to pick up the tab and acts like spending money on almost anything is just a painful experience. But, when Black Friday rolls around, you might find the tables turning for your frugal comrade.

Recent research conducted by myself, Sommer Kapitan and Jill Sundie finds that deep discount situations may truly be the folly of frugal shoppers.


                                             


Frugal individuals are known for being controlled in their spending: They plan their spending out carefully and forgo short-term impulses to achieve long-term financial goals.

But FRUGAL SHOPPERS BEWARE, when faced with deep discounts, frugal individuals seem to let down their guard.


In fact, they are ironically even more likely to buy impulsively when faced with a deep discount, compared to their spendthrift friends. "The more you spend, the more you save," may become the motto for frugal shoppers on Black Friday.

When discussing deals with frugal individuals (in open-ended interviews as part of our research), we found that they pride themselves on buying in a very controlled manner and only spending on those things they truly need. Interestingly, they also express that a good deal signifies "winning" for them. There is something special about these deep discount situations (greater than 50 percent off) that actually gets frugal shoppers excited about the shopping experience. They claim that they get a rush and feel pride when they "beat the system" and get a really great deal.

So what is the problem? We found that this pride may be misplaced. A separate string of studies found that frugal individuals experience a rush of positive feelings when viewing good deals, and as a result, they convince themselves that the "good deal" items are "more needed or necessary" than before they saw the deal.


To examine this idea, we had individuals rate a collection of offerings on need. Two weeks later, we showed them a deal for a medium-need item and asked them to rate how much they thought they needed it again. Their ratings went up!

Suddenly, the item they didn't really need became a must-have item, and even more importantly, as a result, they were more likely than non-frugal individuals to buy the deal. This process likely takes place over and over again on Black Friday, where frugal shoppers are inundated with super deals that become "must have" items. The process serves the purpose of self-protecting frugal goals--as being controlled and smart in their spending.

They are, in fact, being smart if the item is truly needed, right? The problem is that they may not be able to accurately judge need, when faced with an exciting enough discount. The excitement itself may cloud the frugal individual's judgment. Thus, when frugal (vs. non-frugal) people encounter good deals, they are, counterintuitively, more likely to feel they are "too good to pass up." So, if you are that "frugal friend" (like myself), do yourself a favor and bring a spendthrift companion along. They may be able to help you to see the light in a black, Black Friday...


                                                                             
Sarah Roche, Ph.D., is an assistant professor of marketing for Texas Wesleyan University's School of Business in Fort Worth. She is an expert on consumer behavior and the psychology of the shopper.
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