“The real price of anything is the sacrifice you make to get it.”
Every year, Black Friday comes with the same hype: massive deals, crazy discounts, limited-time offers, and those big red “70% OFF” tags that look too tempting to ignore. But here’s the truth most people don’t realize , a huge chunk of these “deals” are not real at all. And the economics behind it is honestly more interesting than the sale itself.
The Truth Behind Fake Price Anchoring
Let’s start with the biggest trick: fake price anchoring. Stores quietly raise the price of an item weeks before Black Friday. Then, on the big day, they “slash” it by 40% or 60%. Technically it looks like a discount, but really, you’re paying almost the same (or sometimes more) than before. This is a textbook example of behavioral economics, retailers anchor your mind to the “original” fake price so the discounted one feels like a win.
Scarcity Marketing: How FOMO Sells Products
Another classic strategy is scarcity marketing. You’ve definitely seen tags like “Only 2 left!” or “Deal ends in 2 hours!” Even when stock is full, and the deal will continue the next day, retailers use scarcity to push impulsive decisions. Humans hate the fear of missing out (FOMO), and stores know exactly how to trigger it. Economists call this the scarcity bias, where the perceived value of an item increases simply because it’s limited.
Loss Aversion: The Psychology That Makes You Overspend
Then comes the biggest psychological trap: loss aversion. We feel worse about missing a deal than we feel good about saving money. So even if you don’t need something, you buy it because the fear of losing the offer hits harder than the logic of saving your cash.
But here’s where it gets even more interesting: retailers don’t actually care if you buy the discounted product. Their real strategy is something called a loss leader , selling one item super cheap to lure you in. Once you're on the website or inside the store, your brain goes into “shopping mode,” and suddenly you're adding other full-priced items you never planned to buy. That’s where they make their money.
The Economic Purpose Behind Black Friday
From an economics point of view, Black Friday is less about real savings and more about stimulating consumer spending at the end of the year. It boosts sales numbers, clears old inventory, and gives companies better-looking year-end reports. Even if they lose money on a few discounted items, the increase in overall purchases makes up for it.
There’s also a bigger picture: competition. When one retailer offers massive discounts, others are forced to follow, or they lose market share. This creates a price war, not because businesses love giving discounts, but because they fear losing customers to competitors. Game theory explains this perfectly, every player reduces prices because no one wants to be the only one who doesn’t.
So, are Black Friday deals completely fake? Not all of them. Some products do get genuine discounts, especially older models, excess inventory, or seasonal stock. But the majority of the flashy “90% OFF” banners are designed more for psychology than actual savings.
Think Before You Buy
The best approach? Treat Black Friday as a marketing event, not a guarantee of low prices. If you actually need something, compare prices before and after. And if you don’t need it, don’t let psychology or fear-based marketing trick you into buying it.
Black Friday feels like a festival of discounts, but once you understand the economics behind it, you see it for what it really is , a festival of clever strategies designed to make you spend more, not save more.
0 Comments