Why You Buy on Impulse

When Florida resident Amy Barr went to high-end furniture store Norfolk (now known as Luxe) just to browse, she unexpectedly spotted a pair of beautiful black end tables that she couldn’t resist. 

“I fell in love with [them] and ended up purchasing all the other furniture around those nesting tables,” Barr tells MainStreet. She ultimately spent $20,000 at the store, despite the fact that she knew the purchase was somewhat impractical.

“We have two boys, a dog and five cats,” Barr says. “The furniture was ruined before it was paid off,” she adds.

Things got more complicated when she totaled her car a week later in an accident that, on top of her new furniture payments, left her with a monthly car payment and a big “I-told-you-so” from her husband.

We may be inclined to classify a purchase as an impulse buy the second it is proven to be frivolous, but what exactly should be considered one?

“By definition, impulse buying is any purchase made without any preconceived plans,” Michael McCall, professor and chair of Ithaca College’s Department of Marketing and Law, explains. This means that an impulse buy can include buying a pack of gum while in line at grocery store or purchasing a Rolls Royce while out window shopping. 

To capitalize on consumers’ general unpredictability, stores are always looking for ways to get you to make additional or more expensive purchases. Interestingly, the tactics differ dramatically depending on the price of the item. Retailers typically get consumers to pick up small items by overloading their check-out areas and carefully organizing in-store displays.

“They create an environment where we are driving on autopilot,” McCall says, citing the fact that McDonald’s often asks customers to donate to charity while they are waiting for their food. “It’s convenient and it seems like a good idea at the time.”  

Big ticket items, conversely, are impulsively purchased when a customer considers them scarce. This means, for example, that you’re more likely to pick up a cashmere sweater when it’s the last one on the rack, especially if another customer is eyeing it.

Similarly, McCall explains, a car salesman may get an ambivalent consumer to drive off the lot by offering a provisional discount, the idea being that you can only get that car at that price at that very moment.

While the idea that you can be manipulated into buying may seem rather daunting, recent research indicates that we may not be as controlled by our impulses as we think. A 2009 study led by Wharton marketing professor David Bell argues that only 20% of purchases can actually be considered unplanned. 

“It comes down to the way you measure what an impulse buy actually is,” Bell told MainStreet. Bell’s Unplanned Category Purchase Incidence: Who Does It, How Often and Why analyzes grocery shoppers' behavior in the Netherlands. He explains that you can’t classify a choice between two brands as unplanned if you intended to buy that particular category of item to begin with. For example, choosing Coke or Pepsi can’t be considered an impulse buy if you know you are going to buy soda.

The same logic can be similarly applied to most big ticket purchases, Bell argues.

“It may seem impulsive on the surface, but there’s more planning behind it,” he says, adding that a person who enters an auto dealership probably has the idea in the back of their head that they want to buy a new car before the salesman has a chance to give them more reasons to.
Additionally, purchases that may indeed be considered unplanned aren’t necessarily problematic. 

“Impulse buying is only bad if you’re unhappy with what you bought,” McCall says. Regardless of the end result, MainStreet offers the following tips to help you curb your impulses.

Enter the store with a plan.

According to Bell, your inclination to impulse shop is determined primarily by how much time you spend in the store and where you travel while in it. As such, the most frugal shoppers are those who enter a shop with a plan and subsequently stick to it. For example, taking the extra time to write out a list before going to the grocery store may actually minimize the items that make it into your cart.

Stick to a budget.


To minimize big ticket impulse purchases or, more pointedly, to avoid jumping at a retailer’s “one time only” deal, don’t allow yourself to purchase anything that will put you over your monthly budget. “It sounds very basic, but it is effective,” McCall says, explaining that retailers have become increasingly aggressive these days in an attempt to coerce even careful shoppers.

Visit stores during off-peak hours.

Bell’s 2009 research indicated that people were more likely to impulse buy when a store was full of people. The overcrowding, he explains, increases the amount of time a shopper spends in a store and often forces them off the path of least resistance. Remember, it’s not just the duration of your stay that increases your chance of splurging; it’s where you go in the store as well. This is why, McCall explains, grocery stores will elect to sell cheap items, such as eggs, below cost, only to tuck them in the furthest reaches of their establishment. 

To minimize getting stuck and/or redirected, you should try to visit stores during off-peak business hours. This can be as simple as visiting a supermarket in the early afternoon or as extreme as avoiding all retail stores on Black Friday. 
Resist the urge to shop online.

Online shopping is especially dangerous for impulse buyers. Online retailers are increasingly good at playing the scarcity card, as Amazon’s listing for Apple’s popular iPad attests. The page pointedly lets consumers know that they should “order soon” as there are only four of the devices left in stock. 

Pay with cash.

Online purchases are also susceptible to impulses in that they require a credit card or other electronic mode of payment. According to Bell’s more recent research (a full report is due out in January 2010), consumers become more frivolous when they break out the plastic. “People may pay $25 for a baseball ticket when they use cash, but they will use $50 when they are paying on credit,” he explains.  

Do you have any other tips for avoiding impulse buying? Let us know in the comments section!

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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