How would you feel if you bought a pair of shoes at a shop for $200, only to discover that the salesperson sold the exact same shoes to your friend for $100 an hour ago? Other than murderous, you would also be feeing pretty damn silly for becoming a victim of price discrimination.
Price discrimination happens when someone sells you a product or service at a different price than it was sold to someone else. And no, price discrimination doesn’t only happen at Chatuchak Market in Bangkok. Just because haggling isn’t a way of life in Singapore doesn’t mean you can’t protect yourself from price discrimination. Here are five ways we unknowingly become victims.
1. Buying retail
The most common way to purchase products is to pay retail prices at a shop. Why? Because it’s the easiest, most convenient way to buy. Even an idiot can do it. Just walk into the shop and take out your wallet. They’ll even help you count the money if you can’t do it for yourself.
Unfortunately, buying retail is also the most expensive way to shop.
For instance, let’s say you want to buy a new 13-inch Macbook Pro, the retail price of which is $1,488. You could walk right into a shop and pay the full price which, amazingly, some people still do.
In contrast, you could escape paying full retail price buy purchasing that same Macbook through a teacher friend at the price of $1,348. You could also get a refurbished Macbook Pro online at a $200 discount on the Apple website.
Before you make a big purchasing decision, instead of buying retail, first check coupon websites like Groupon and also find out if there are any big sales happening (the huge electronics sales at Expo can save you hundreds of dollars). If the item is something you don’t mind buying second hand, check sites like eBay, Craigslist and Gumtree, too.
2. Buying the minute the product comes out
Back in 2006, I bought my first digital camera, a 5 megapixel Sony Digital Ixus that cost me $600 of my hard-earned cash. Today, you can buy digital cameras with the same specs for $100.
If you can live without it, resist the urge to buy a product the minute it comes out. The first price tag attached to an item is always the highest. And this rule doesn’t just extend to electronics.
When Topshop releases a new item, you’ll most definitely have to pay full price. But resist the urge to be the first one spotted wearing a new style and before you know it it’s in the bargain bin.
A friend of mine who’s into photography doesn’t buy the latest equipment the minute it comes out. Just by waiting a year and then buying her stuff second hand on local photography forums, she can knock 50% off the sticker price on almost-new items.
3. Buying in a more expensive store
It never fails to amaze me how two different shops can sell the exact same thing at vastly different prices, yet people have no trouble paying more just because one shop nicer décor than the other.
For instance, if you buy a generic product like, say, Chips Ahoy cookies at Jasons Supermarket, you’ll be paying at least 30% more than if you buy the same item at FairPrice or ValueDollar.
4. Buying in smaller quantities
Those tiny tubes of hand cream and mini bottles of perfume make great gifts, but they’re not very smart purchases when you’re buying for yourself.
If you’ve been paying attention while shopping at the supermarket, you’d have noticed that the per-millilitre or per-gram price is always lower when you buy a product larger quantities.
This applies to most products that are sold in different quantities, whether you’re buying cans of tuna at the supermarket or bundles of American Apparel tshirts online.
For instance, if you buy Dermalogica facial products on Amazon, look out for the “professional” or “salon” sizes, which can save you at least 30%. You’ll be stuck with a giant bottle that will last year more than a year, but so?
5. Paying more for a product that doesn’t add much value
There are some people who say you get what you pay for. That’s not exactly true. There are times when you do pay more, but what you get sucks anyway.
Many products are priced at a premium because people believe they’re getting better quality or more features for their money. But in many cases, while you do receive a tiny bit of added value, it doesn’t justify the increase in price.
For instance, a Starbucks takeaway coffee is more than 5 times the price of a kopi “da bao”, but does it really give you 5 times as much satisfaction as the latter? Probably not.
Don’t just save up and pay, think about how you pay
Another way to maximize your purchases, whatever they be would be to consider the payment method you’re using now. If you aren’t taking advantage of certain benefits that credit cards give you, you could be wasting a good opportunity. Cashback credit cards or Shopping cards make things a whole lot sweeter when you pay for a purchase.
How to you avoid being a victim of price discrimination? Let us know in the comments!