Warning: Do Not Fall Victim to this “Sale” Tactic on Black Friday!

After a day of gathering around the dinner table with our family to acknowledge our abundance, feel deep gratitude and give thanks for all that we have, we lean back with our full bellies, take a deep sigh…

…and rush out to go buy all the things that we don’t have. 

People camp outside of stores overnight to hold their place in line and make family traditions out of these “door buster” sales, where they rush in to nab things as quickly as possible, full of anxiety and adrenaline over missing out on a bargain which can lead to elbowing, trampling and full-out fighting in some cases. 

But how do we know when a sale is really a sale?

The shortest answer is: We don’t really. Because the real question is: How do we know an item’s true value?

The only way we humans can agree on something’s value is by comparing it to other similar objects with arbitrary values assigned to them. There are loads of data and studies on human psychology that all conclude our inability to assess value rationally. I’ll get back into this in a moment. 

First, I want to share a story with you about J.C. Penny to help illustrate this point. 

J.C. Penny has always been known to have great deals. When you walked in, there were sales signs everywhere! The avid shoppers of J.C. Penny were, quite frankly, addicted to these sales. They would come in with coupons clipped from newspapers and enjoyed the thrill of the hunt among the major bargains that rolled out each week. 

In 2012, a new CEO was brought on board: Ron Johnson. He assessed J.C. Penny’s extreme sales tactics and decided to make a big change and be more transparent with customers. He instituted the “Fair & Square Pricing Method” across the board. He got rid of all the “deals” so there were no more sales, bargains, coupons or discounts. 

Instead, he had J.C. Penny prices reflect exactly what they wanted to get for each item…which was the “sale price” that was always displayed previously. The prices were still the same…they just no longer had a big sign saying “SALE! 40% OFF!” and the tag no longer showed a higher price with a slash through it. It just simply showed…the price. He wanted to get rid of the deceptive practice of marking prices up simply to mark them back down again. 

He saw how the customers and sales clerks were performing a sort of “theater” with their collection of coupons and clothes stands full of sales. They would lower the prices in all sorts of creative ways in order to get to the actual retail price of an item. Ron Johnson thought the “Fair & Square” pricing method would prove they were more trustworthy, clear, respectful and less manipulative. He thought consumers would appreciate how they treated them like respectful, intelligent humans.

Instead, consumers were sad, angry and even enraged. They refused to shop there any more and even formed online hate groups to protest the store and vent their frustrations.

Of course, sales plummeted. 

In fact, J.C. Penny lost $985 million dollars in one year! 

As you can imagine, poor, fair Ron Johnson was fired in his first and only year as CEO at the company and immediately after his removal, the sales returned. This means that prices actually ROSE 60% after he left…so that they could then slash the artificially inflated price and mark it as a “SALE!”…which was the same exact price that it had been before, even under Ron Johnson’s leadership. Indeed, after the “discount,” the items were now the exact same price that they were at other retailers, too.

However, it appeared that J.C. Penny was once again offering incredibly great deals. Voting with their wallets, customers elected to be manipulated. They loved the game! They wanted these deals and bargains–even if they weren’t real. 

What Ron Johnson failed to understand was that there is a psychology behind pricing and most retailers do realize that we have a complete inability to assess value rationally. It’s one of the many effects of “relativity”–where we judge items relative to the original posted prices. J.C. Penny artificially helped their consumers make the comparison by posting the discount as a percentage and adding notes like “SALE” or “SPECIAL” to focus their attention on the amazing relative price they offered. (The fake price.) 

Would you like a $60 pair of shoes? 

Or would you like a $100 pair of shoes, marked on sale for 40% off that is now only $60?

Mmmhmm. 

You want the pricey shoes marked down. It’s a steal! 

It shouldn’t matter, should it? $60 is $60. But relativity works on us at a very deep level and we simply do not see the two as the same thing. See? We humans are not logical. 

In a vacuum, we can not figure out what the value of a crock pot should be. Or a lawn mower. Or a house. Or a coffee. This is where relativity comes in and how we start comparing similar objects with similar prices. And then when we see an inflated price, we get knocked off kilter thinking we’ve found something incredible value, but at a deal

Do not fool yourself into thinking that these Black Friday deals are deals at all. These large retailers have a bottom line to make. They know how much it cost to create an item. They have projections of how many units they will move on this “shopping holiday” (which ironically is now becoming a “shopping month,” as retailers like Walmart have “Black Friday Deals” starting as early as November 1st!). They have elevated the prices in preparation of these “big drops” in pricing. They have also been caught using cheaper materials for Black Friday sales items. Yes, the TV you buy on a Black Friday sale may be made with different quality levels than that same TV bought on any other day of the year. They are not taking a loss on their pricing, I promise you. 

But you are going to take a loss to your bank account’s bottom line if you fall prey to this psychological trick. (Plus all sorts of other psychological tricks they are playing to, such as that clock ticking, as if you’re running out of time to purchase an item. “SALE ENDS AT 11:59 PM!”)

Would you like my advice?

  1. Don’t participate in it at all. I’m serious. Stay home, eat your leftovers, and continue basking in the glow of gratitude for the true wealth you have in your life.
  2. If you are adamant to begin Christmas shopping and can’t stand the thought of missing out on these so-called deals (I know, I know…you’re on a tight budget this year), then MAKE A LIST …now. Right now. Before you see any ads, sponsored posts, product recommendations, or sales signs. Stick to that list and be ruthlessly strict with yourself. Put “horse blinders” on so you don’t even look at that bright red sign that says “75% OFF” when you walk down the aisle to get the thing you intended to get. 
  3. Remind yourself that things are just things. They do not equate to love. Love is not transactional. You do not have to participate in this gift-transactional holiday that was concocted by shopping malls and corporate advertising executives (Read Chapter 2 of my book, “Have Yourself a Minimalist Christmas” if you’d like to hear how this holiday began just 200 years ago in the U.S.). Start coming up with ways to give something consumable, experiential or homemade/handmade instead. 
  4. Start reading more books on the psychology of spending/consumerism and the rise of technology behind marketing today. It’s fascinating and terrifying stuff. Once you understand how you’re being played, it becomes so much easier to resist falling prey to these games. 

I know this post may come across as preachy or harsh to some, but sometimes we need that–especially when it comes to spending and consuming. Whatever you do, do not go into debt over Christmas gifts. Do not get sucked into paying interest for items that (I hate to break it to ya) are probably just seen as clutter by the person you gave it to. 

Remember: Clutter adds to people’s mental load and causes a rise in cortisol (stress). It adds up and adds to overwhelm and anxiety. It takes away their time in their already too-short and very busy life, as they now have to manage, dust, clean, arrange, store, pack and move around this item. This item may stick with them for years because of the guilt attached to it…they feel like they can’t give it away because you gave it to them as a gift and now it has been deemed as special or sentimental. You don’t want to do this to your loved ones, do you?? Keep this in mind when you are compiling your Christmas list or Christmas shopping. It just may keep you from buying clutter.

Want more tips? Here’s my post on 7 Minimalist Principles to Help You Save Money This Christmas (it also has a list of other tips at the bottom, too!). Soon, I’ll be posting a blog with gift ideas that you should consider that I think will be appreciated by adults and kids. In the meantime, stay strong! Start bracing yourself for the “shopping season” and switching your mindset now, so that you can have a slower, more enjoyable and more frugal holiday.

  • p.s. I found this story about J. C. Penny in Dan Ariely’s book “Dollars and Sense” and summarized it for you here. If you find this kind of stuff fascinating, go check out his book on audio or in print. Highly recommend!