That's not the right Price!

I remember as a kid, my parents coming home from the weekly grocery shopping trip and helping them check off the grocery prices against the cash register receipt.  Quite frequently, the prices didn’t match.  This was back when employees looked at the item price on the shelf, set the price by turning a dial on a sticker gun, and clicked a trigger to eject a sticker that was applied to the item.   If it was replacing the old price, the old sticker would need to be removed or the new one just went on top.  The cashier would read the price on the sticker and manually key in the price. No scanners back then.  There were lots of places for things to go wrong on what you were charged and hence why my parents went through this price checking routine.

Fast forward to present day, where prices are read by scanning bar codes, cash register screens face customers and a lot less manual keying.  This has led to overall better accuracy but it’s still not perfect.  I’ve seen claims that as much as 3% of scanned prices are incorrect.  Like happened to me the other day when I bought something on sale but when the item was scanned at the cashier, the wrong price came up.   I pointed it out and thought I’d just get the right price but I got a lot more.

I forgot a lot of Canadian retailers voluntarily follow the “Scanning Code of Practice” which basically gives you the product for free if the correct price is $10 or less or a discount of $10 if the correct price is higher than $10.  Take a read of the practice to get all the details.  You’ll see this sign displayed at the cashier for those that follow this practice.  This code encourages retailers to ensure their prices are accurate and to have a standard claim mechanism.  The $10 discount sure helps with this.

You should have seen how fast the store manager went off to fix the scanned price!!  I ended up getting $10 off the sale price.

For my readers, outside of Canada, you’re not out of luck.  There may be similar practices in your area such as the  “Get One Free” in Connecticut or “Code of Practice for Checkout Systems” in Australia.

So watch your prices and if a mistake happens, check if the store follows this practice.

A couple of last words.  Thanks everyone for the survey responses for future posting ideas.  l’ll leave it open for anyone else who still wants to vote.  The top three so far are: (1) Alternative payment systems (PayPal, Apple Pay, Google Wallet) (2) RESP basics and (3) Life Insurance basics.   I’ll start with the Life Insurance basics soon since I’ve been procrastinating on finishing the insurance topics.

James Whelan

Follow @monymattrs4life

The price made me do it!!!

It's been a while since my last posting.   My last couple have discussed disability and critical illness insurance.   Before we take on life insurance, a really meaty topic, I'm going to divert a bit into a few other topics while I figure out how to break up life insurance into digestible pieces.

Have you ever been in a store or online, looked at all the prices ending in 99 and wondered if anyone is really ever affected by them?    Apparently, it does work and makes us feel like we are getting a deal.    

The interesting thing, in Canada, is we no longer have a penny coin so, if you paid in cash, you wouldn't get the 99 price.    

Last year, I read an article called “The Psychology of Price” done by Terry O’Reilly as part of his CBC Radio Under the Influence series.  In it, he talks about how marketers use different pricing strategies and how these influence our purchasing behaviour and our enjoyment of our purchases.  Ever since I read this, it’s made me more aware of their existence that I think I always intuitively  sensed but never really fully realized the impact.

One very effective strategy, he talks about is “Anchoring" and has two pieces.  The first, is showing you a price to help convince you of the item’s value.   If an item has a high price, your perception is altered to make you associate a higher value with it.   The second is offering multiple products with similar basic functions but with different prices.    The higher priced item may make you think the lower priced item is a good deal.   After reading this article, I realized this is everywhere.  Here are two examples.

You want to make a charitable donation and are offered some preset amounts.

 

The smallest one seems to be too low and feels a little "cheap".  The biggest one(s) is more than you're willing to give, so you pick one of the middle ones.   What if there were no preset amounts?    Would you have given as much as you did?

Here is a second example:

You want to buy a fruit arrangement online.    You find an arrangement you like and click on the link to get details.

There are 2 prices and the arrangement shown is for the larger one.   You think the larger one looks nice and the smaller one is only $10 cheaper so why not get the larger so you're sure of what you're getting.  You've just been steered towards the higher one.

Well that’s all for now.  I’d highly recommend taking a read of the full article.  If you have any ideas for a future topic please, feel free to post a comment (anonymously if you’d like) or email me.

James Whelan

moneymatters4life.blogspot

moneymatters4life@gmail.com
Follow @monymattrs4life