I recently came to the sad realization that I needed a new pair of shorts and maybe a dress shirt too. I would have to (gasp!) go to a clothing store. For some reason these stores group everything by meaningless brand names instead of just having all the shorts or shirts of the same size located together. Even more puzzling is having my purchases ring up at the cash register for less than the marked price.
I’m pretty good at looking around for signs that say something like “25% off marked price.” So, I usually know what price to expect when I get to the cash register. But many stores (Sears and The Bay come to mind) seem to routinely charge me less than I expect.
I remember buying some socks a year or so ago and the lady at the cash actually apologized for the fact that I’d have to pay the marked price; she then suggested that I might want to go back and choose different socks! Fortunately, I declined; they turned out to be good socks.
What advantage does this give the retailer? Superficially, it would seem they are leaving money on the table. Maybe people start to count on these price reductions? But if this were true, then these retailers are making customers unhappy when there is no secret price reduction.
Another possibility is that these retailers are trying to get their customers to focus less on price. After all, what’s the point of looking at the price if you know it’s likely wrong? I’m doubtful about this possible explanation, though. I certainly pay attention to the marked price even if I suspect the real price is lower.
My best guess is that this pricing strategy makes customers feel as though they got a good deal. The most prized customers, compulsive shoppers, have an extra justification for making their purchases and are likely to come back sooner.