Shop Smarter: Avoid this Retail Trick

While some of us have our shopping completely done, others haven't even started so here's a quick tip to avoid spending more...

Retail stores have a clever way to get you to spend more: "the decoy effect." Behavioral research conducted by Dan Ariely, Ph.D of Duke University, has shown that when customers were given a choice between two products, one of which is priced lower and is lower quality (say an MP3 Player that holds fewer songs), they'll often choose the cheaper one.

BUT when a third (decoy) item is introduced at an even higher price, shoppers are more likely to opt for the mid-priced-one. Meaning - adding another product nudges shoppers up the price scale instead of making them stick with the bargain buy.

Bottom line: Think carefully when you see a display of products at varied prices, and hold steady at the price you can afford.

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