Ah, upselling. If you have ever shopped at any type of store, odds are good that you have been exposed to upselling. What is an upsell? Well, an upsell is a marketing technique used to get you, the consumer, to part with more of your hard-earned cash. According to dictionary.com, the verb upsell means “to try to persuade a customer to buy a more expensive item or to buy a related additional product at a discount.”
Retailers the world over use this technique. Businesses that you might not even think of use upselling to attempt to bring in more revenue. For example, in high school and college I worked at a movie theater. In addition to selling tickets, popping popcorn, and sweeping floors, my duties included upselling. For example, when a customer ordered a small popcorn and a medium drink, we were trained to ask, “Would you like to get a medium popcorn instead for just $0.25 more?” and so on and so forth.
There is a reason why retailers use upselling as a sales technique, folks. The reason is because it works. When my 20 year-old self would ask people if they wanted to spend just a little bit more to get what seemed like a lot more popcorn, they often took me up on it. Why? Because people love to think that they are getting discounts or good prices. The fact that they had initially decided that they did not need or want that much popcorn somehow escaped their brains as the DISCOUNT lights and sirens started flashing in their heads.
Now, getting a discount in and of itself is not a bad thing, right? However, it can become a bad thing if that “discount” causes us to purchase things that we don’t need or won’t use, simply because of the better price. Clothing stores are notorious for this: maybe one t-shirt costs $15, but if you buy two they are $12 each. Seems like a great deal, right? Never mind the fact that you walked into the store only needing one t-shirt! You’re getting a deal!!
So is that a bad thing? It depends. Do you need the extra t-shirt? I would argue that perhaps you don’t if you walked in with the goal to only purchase one. But the thing about us human beings is that we are great at justifying things. We may say things to ourselves like, well I can always use another t-shirt or hey it’s a great price and that means I won’t have to buy t-shirts for a while. Does that justify the purchase? Maybe, maybe not.
The power of upselling recently hit home for me when I went to a trade show with my mother and some family friends. The trade show had been going on for a few days and the others had already gone to it before my hubby and I arrived in town. When the five of us went back together, our friend “John” was going to pick up some custom embroidered hats that he had ordered a few days earlier. As my hubby and I listened in wonder, he explained to us that the price for one custom embroidered hat was $25, but if you bought 12 hats the price dropped down to $10 each.
So he bought 12. Of the exact same hat.
What a great upsell- for the retailer. John wanted one hat, which cost $25. But he ended up buying 12, at a cost of $120. In other words, the retailer managed to turn a $25 purchase into a $120 one.
Does John have 12 heads? No. Is he going to share these hats with other friends and family members? Probably- he’s already given one to my mother and one to his wife. But it wasn’t a Christmas gift or anything like that. He just gave hats to them because he now has 12 and he probably doesn’t need that many.
Now, in his defense, John does work on a farm. He is often outside, and he needs to wear hats because his hair is pretty thin on top and otherwise he’d be getting skin cancer pretty fast. Because he works on a farm, he is often getting his hands, clothes, and hats dirty. But it could still be argued that the purchase of 12 hats was excessive.
So how can you avoid an upsell? By becoming a more informed consumer and being aware when marketing techniques like this are being deployed against you. That’s right, against you. There is no retailer in the world whose sole mission is to help you buy things as cheap as possible, folks. Most retailers are out to make money, period.
Here are some basic questions to ask yourself when faced with an upsell situation:
1) Do I NEED this item? ß This is the most important question!
2) Will I be using this item within a relatively short time frame (in other words, before the item becomes lost, forgotten, expired, or damaged in my home?)
3) Will the purchase of this item cause me to have to spend even more money on other items (batteries for electronics, extended warranties, matching clothing items, etc)?
4) If I purchase the extra item(s), is it going to sit collecting dust in my home?
5) If I purchase the extra item(s), will I find myself giving it away to others? If the answer to this one is “yes” and you’re not out shopping for birthday presents, that’s a sign that you probably don’t need it.
What do you think? Have you ever purchased an add-on item that was a “great deal” only to live to regret it?
Dee is a personal finance enthusiast and blogger who is working hard to live a frugal lifestyle, ditch debt, and create multiple streams of income. She hopes to inspire others to achieve their financial goals by doing the same and writes about the journey on her blog, Color Me Frugal. Follow her on twitter @ColorMeFrugal, Like Color Me Frugal on Facebook, and be sure to check out her blog over at www.color-me-frugal.com.