Make sure your year doesn't get off to a bad start by steering clear of these sneaky shopping tricks...
With Christmas over for another year and January right around the corner, deal-hunters nationwide will be priming their wallets for the New Year sales. But it’s not all discounts and bargains – there are still some sneaky tricks that shops and websites are pulling that you should watch out for this January.
Luckily, the Office for Fair Trading (OFT) has identified a variety of dodgy advertising tactics that retailers are using all year round to trick you into parting with your cash. Most of them revolve around convincing you that you’re getting a great deal, when in reality, you’re not!
The research is based on a survey of 3,000 people and also points out that these tactics are not illegal, but could be against the consumer’s interests if used in a certain way.
Drip pricing
The report states that this is the most common and frustrating advertising strategy used by retailers and involves publicising a low headline price but then adding in non-optional extras at the purchasing stage.
It often happens online as retailers add in booking fees, delivery charges and credit-card payment fees – vastly inflating the headline price. A common example is the baggage handling or credit-card fees charged by many low-cost airlines.
But this can also occur on the high street – how many times have you popped into a store to look at a cut price electrical product, only to have the salesperson tell you that it won’t work without an expensive accessory? And that’s before they’ve even get onto the ‘optional’ insurance and repair plans.
Yet the research shows that we keep buying ‘drip-priced’ products because we will focus, or ‘anchor’ on the first price we see – and therefore perceive that we’re getting a bargain, even if we’re not!
Complex pricing
Complex pricing is similar to drip pricing in that it depends on you being drawn in by a cheap headline price but paying for a bundle of separate charges that will turn out to be more. The complexity of the charges also means that you may not be able to easily compare products from different retailers.
A typical example is a mobile phone company halving the price of an iPhone as part of the January sales. The headline price for the handset may look attractive, but there will probably be separate prices depending on the tariff you take out. This will most likely mean the phone is not half as cheap as you initially thought.
Many utility and media providers will now bundle together several services into one package. Whilst this may seem convenient, it also prevents you from getting the best deal as it's harder to place individual value on each part of the package. This means that you can’t easily compare services as the make-up of the packages will vary between providers.
All a bit complicated isn’t it? Well, that’s exactly the issue the OFT have with this pricing tactic as it’s now a lot easier to plump for a simple, bundled package than shop around for a better deal.
To read about how save on your energy bills head over to Save £££ with an online energy plan.
Reference pricing
You’ll probably see this tactic in every store you walk into throughout the January sales – and indeed the rest of the year. It’s the classic ‘was/now’ or ‘RRP/our price’ advertising.
The problem is that the discounted product may not have ever been on sale as the ‘was’ price, and the RRP doesn’t necessarily bare any resemblance to real-life sales prices.
This tactic is designed to convince you that the product you’re buying is worth more than it actually is and hence you’re getting better deal than you actually are.
Reference pricing is also a problem when stores decide to run lengthy sales campaigns – is a product really ‘on sale’ if it has been at the same ‘bargain’ price for the last six months? I guess that’s for you to decide!
Time limited offers
Now this is a bit of a tricky one as all offers, especially those in the January sales, will obviously be time limited. But the OFT’s problem with this tactic is when the time limit is arbitrary. In other words, the discounted stock doesn’t really need to be cleared by the offer end date so the deal can be extended if necessary with little notice to the customer.
Time limits cause you to place more value on a product as you perceive that it is scarce and desirable and will therefore sell out quickly.
The whole concept of the January sales depends on this ‘buy now or lose out’ tactic. So whilst there’s no denying that you can pick up some great bargains in the New Year’s sales you should always be asking yourself, ‘do I really want/need this product, or am I just buying because it seems to be a good deal?’.
Supermarket scams
Two other dodgy advertising tactics identified by the OFT are concerned with volume offers like 3 for 2’s and 2 for £10 deals and the practice of baiting sales where stores lure customers in with great offers but hardly hold any of the discounted stock.
To find out more about these tricks and other scams that could ruin your hunt for New Year grocery bargains read Supermarket scams to watch out for.
The OFT response
The OFT says that it will be cracking down on these misleading advertising practices, but will they really be able to? After all, none of the practices are illegal – where do you draw the line between tricking and selling?
And anyway, surely the British public are savvy enough not to fall for dodgy advertising schemes?
What do you think? Let us know in the comment box below. And to read more about rip offs and how to avoid them head over to 4 major rip-offs you can fight back against.
This is a classic article which has been recently updated.
More: Watch out for this Amazon scam! Scammers exploiting protection meant for you!