Last week I went to the drug store to pick up a
prescription. The druggist was at the back of the store so I
walked past the greeting cards, the headache medicine, and the
motor oil. I couldn't walk straight back; I had to zig-zag my
way through the aisles.
Then I went next-door to the super market to buy a quart
of milk. Again I had to walk to the far back corner, past the
bread smells in the deli, around baskets full of canned soup
on special, and along the soft drink aisle. When I checked out
in the express lane, I stood waiting next to packs of
batteries, ball point pens, and bags of candy. The woman in
front of me was charging her food on a VISA card.
Stores have done elaborate studies which show that for
every minute they can delay you, you will spend money on
things you hadn't planned to buy. Some stores estimate that
impulse buying goes as high as 50%, even in grocery and
hardware stores! If you buy an item on impulse, chances are
you didn't really need it (or it would have been on your
list) and you paid much too much.
Notice that food stores are starting to accept charge
cards. Why? Studies have shown that people spend approximately
20% more with charge cards than with a check or cash. This is
perhaps the worst way to use a charge card since you are
charging a short term purchase and paying it off long term.
In 1999 you could be paying for a meal you ate in 1995.
After shopping I went to a fast food restaurant for a
small soda and a burger. "Don't you want some fries with
that?" "No." "Or how about a large drink? It's just a few
cents more." No, I didn't.
At the fast food restaurant, they used "suggestive
selling," asking me to buy something I hadn't ordered. An
employee once told me the restaurant made 10% of its sales
But wait, there's more!! Advertising tries to get us to
spend extra money on our kids, since we feel guilty about not
spending more time with them. (Of course, if we spent less
money, we'd have more time.) A host of products from
deodorants to laundry detergents and softeners tries to
convince us that we can avoid embarrassment if we will only
buy their product. Advertisers know that people fear
embarrassment even more than death. (That's really true.)
Products lure customers with rebates. Companies know
that many will take the bait but never get around to actually
sending off for the refund. (It's called "slippage.")
Who pays for all of this? You do. When you buy a heavily
advertised product, in a shiny box, that you always find at
eye level on the shelf, you are paying for the advertising,
the packaging, the shelf space and the special promotions.
Magazine subscription companies offer tempting
sweepstakes and seemingly good prices, but a little quick math
should tell you that a company without the sweepstakes will
charge less. For example, Delta Publishing, mentioned in the
Free Sampler issue (Tel. (800) 728-3728), has no sweepstakes
and sells magazines subscriptions for much less.
So what do you do? You can't avoid the stores or
advertising, but you can be aware that merchants want you to
spend more than you mean to. Just a few dollars a day adds up
to tens of thousands of dollars over time.
It's a small fortune that could be saved for your child's
college, or your new house, or your retirement, or your dream
vacation, or something that you really want.