Our brains are costing us money! That’s the conclusion of behavioral economist Dan Ariely. He says that we become irrational when we hear the words “sale” or “free” – and marketers know this. So they take advantage of our lapse in logic to get us to spend. Here’s how it works:

  • First: Stores use the right words. According to a study in the Journal of Retailing, we’re drawn to words like “sale” or “special,” because they make us think the item we’re buying has a high-value, while words like “clearance,” or “marked down,” make us think an item’s low-quality. We’re also drawn to the phrase “limited time” – even if we’re not necessarily shopping for a certain item - because we associate those words with high-value. That helps explain why one-day Black Friday sales are so successful.

  • Another sales trick: Stores make sales fun. Experts say part of the “rush” people get from shopping is clipping coupons - or using coupon apps on their cellphone - and then planning a day around a specific sale. Because if we could just walk into any store and expect low prices all the time, then shopping would be boring. But when we can hand over a coupon, and instantly save 20-percent, that triggers a blast of dopamine that makes us feel like all our bargain hunting has paid off.

  • But our biggest weakness is “free” offers. Behavioral economist Dan Ariely says, when the price of something is said to be zero, it blinds us. We get so excited that we don’t realize we will end up paying in some way. For example: You go to the car dealership and the salesperson says, “This car is a bit above your price range but it comes with free oil changes for three years!” You think – “free oil changes, woo hoo!” So you get the car, thinking you’re saving money. What you don’t realize is that the car cost you $3,000 more than you wanted to spend – but you’ll only be saving $600 in oil changes.