Can You Ever Trust a Sale?

If you've been pondering this question, you're in the right place. Sales and discounts are everywhere, especially during times of economic strain when saving money becomes a top priority. The allure of bright discount signs and the promise of savings often draws us in. But recent legal actions against two of Australia’s biggest supermarket chains, Coles and Woolworths, have raised a critical question: are these discounts truly beneficial for consumers, or are they just clever manipulations? Accused of misleading pricing practices, these giants highlight the complex and often deceptive psychology of sales.

The allegations center around price spiking, where items are briefly sold at an inflated price before being “discounted” to what is often the original price—or close to it. For example, an item priced at $10 may be increased to $15 and then “reduced” to $12. This tactic taps into the anchoring effect, a psychological principle where consumers focus on the original, higher price, making the lower price appear like a bargain. From a marketing perspective, this creates the illusion of saving money. Neuroscientific studies reinforce this by showing how discounts activate the brain's reward centers, lighting them up “like a Christmas tree” and creating a feel-good reaction. This emotional high can override rational decision-making, making us more likely to purchase items we might not even need.

But the manipulation doesn’t stop at pricing. Supermarkets are meticulously designed to influence spending. Essential items like milk are placed at the back of the store, forcing customers to walk through aisles filled with tempting products. Bright discount tags and bold colors draw attention to specific items, often prompting impulse buys. Even something as simple as the font size on a price tag can influence perceptions, with smaller fonts for original prices and larger, more prominent fonts for “discounted” prices. This approach, combined with tactics like the “left-digit effect”—where $9.99 appears significantly cheaper than $10—subtly yet powerfully influences consumer behaviour.

The strategic layout of stores also plays a critical role. Supermarkets often mimic the psychology of casinos, aiming to keep customers inside as long as possible. Frequent reorganization of items, such as moving washing detergents to a new aisle, disorients shoppers, encouraging them to wander and make unplanned purchases. Meanwhile, crowded shelves, as seen in Aldi stores, signal low prices, whereas sparsely stocked, minimalist setups in boutique stores create an illusion of exclusivity and justify higher pricing. These methods demonstrate how deeply rooted sales tactics are in psychological manipulation.

This is not to say all discounts are deceptive. There are legitimate reasons for price reductions, such as clearing out excess stock, selling perishable items nearing their expiration date, or promoting seasonal sales. Recognizing these genuine instances can help consumers make informed decisions. Experts suggest pausing to consider why a product might be discounted. For example, is it part of an end-of-season sale, or is a newer version of the product about to be released? Asking these questions can help differentiate between genuine deals and manipulative pricing.

However, many consumers, overwhelmed by busy lives and financial pressures, struggle to resist these tactics. With limited time and mental energy, it’s easier to rely on situational cues like discount signs to guide purchasing decisions. Creating a shopping list before heading to the store can be a simple but effective strategy. By sticking to a predetermined plan, shoppers can reduce the likelihood of falling for impulsive purchases driven by discounts.

As the Australian Competition and Consumer Commission (ACCC) pursues legal action against Coles and Woolworths, the broader implications of this case extend beyond these two companies. It raises awareness about the pervasive influence of marketing tactics across industries. If businesses are so adept at influencing our spending habits, the question remains: how can we, as consumers, become more mindful and outsmart these strategies? Is it even possible to trust a sale in today’s world of consumer capitalism?