My daughter was amused, but not impressed. "You mean, I have to buy eight sodas to get the free one," she asked. "That's not a good deal."
I was proud that she had grasped the dangers of Buy-One/Get-One (BOGO) free purchases. It's a lesson that stumps many little kids and adults. At some point in our shopping careers, we've all stumbled over the buy-a-lot/get-a-little-free pitch. For instance, one salon offers promises a free manicure after the 10th session. Additionally, one area coffee shop has a similar buy 10 (coffee cups) and get one free. Perhaps those offers are valid if you are really a frequent customer. But what if you feel compelled to spend a lot just to get the so-called freebie?
The lure of free stuff is hard to ignore, even when we know better. This past week, for example, I seriously considered traveling quite a distance from my home to collect a free $10 gift certificate from an area store. Fortunately, I began to calculate the cost of that free gift, including the value of my traveling time. What's more, very few items at that store cost $10 and it's very likely that my free gift would have cost an additional $30-$50 out of my pocket.
Bankrate.com has a great list of money traps to avoid, including the BOGO Trap: 7 'psycho' money traps and how to beat them. Here's how to elude the BOGO spending bait:
"Whenever you see the term 'free,' consider it a warning to slow down and consider your choice very carefully," says Ariely. Do the math and always consider what you are giving up when you choose the item attached to something "free." Usually -- but not always -- there is a real cost to something touted as "free." -- Dan Ariely, the James B. Duke Professor of Behavioral Economics at Duke University and author of "Predictably Irrational: The Hidden Forces That Shape Our Decisions" as quoted in Bankrate.com
"7 'psycho' money traps from Bankrate.com
1.The lure of 'free'
2.The 'anchor-price' persuasion
3.The instant-gratification attraction
4.The dollars-to-donuts decoy
5.The separate-buckets blunder
6. The 'sacred-fund' slip-up
7.The lost-money fallacy"
Here's how to buy my new book: