The shady economics of ‘buy one, get one free’ deals

Let’s imagine you’re hankering for a treat and you are offered a choice: A Hershey’s Kiss for $0.01, or a much higher-quality Lindt truffle for $0.15. Which would you go with? In his book Predictably Irrational, behavioral economist Dan Ariely ran this exact experimentand found that 73% of folks chose the pricier Lindt But … See more

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The Shady Economics Of ‘buy One, Get One Free’ Deals

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BOGO: The Truth Behind Buy One Get One Free “Sales”

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Jun 10, 2024 · It appears as if the customer is saving $4.39 in the sale (the price of the “free” one), when they are, in fact, saving only $3.60. This is a very common sales tactic.And while …

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FAQs about The shady economics of ‘buy one, get one free’ deals Coupon?

What is a shady Bogo deal?

A common tactic with shady BOGO deals is that the retailer will simply make the first item more expensive. You might, for instance, see a deal where you buy one shirt for $40 and get one free — but it’s possible that the true price of the shirt is $20, and you’re merely buying 2 at list price. ...

Is buy one get one free a good deal?

“You’re often charged a price that nobody has ever paid; anything that’s free is just carved off the regular price.” Another misconception with buy one, get one free deals is that your total utility (satisfaction or happiness) is higher since you paid less for two items than you would’ve at list price. ...

Do people prefer “buy-one-get-one free” deals?

By tracing eye movements, we examine participants' attention allocation when deciding between “buy-one-get-one free” (BOGO) deals versus deals that offer an equivalent price reduction. Results show that people prefer BOGO deals, and they tend to choose them over price reductions even when the deals are equal in terms of net value. ...

Why do consumers prefer buy-one-get-one free (Bogo) deals over multi-buy percentage deals?

Consumers prefer Buy-One-Get-One free (BOGO) deals over multi-buy percentage deals. The preference is amplified when the discount is relatively high. Complementarily, BOGO deals attract more attention at high discount levels. Promotion deals and price reductions are common strategies retailers use to attract consumers. ...

What is your “buy one get one free” Nightmare?

My “buy one, get one free” nightmare would be getting two boxes of “family assorted biscuits”. I’m not talking about any old biscuits; I mean the ones that come in a huge red box. We get them as Chinese New Year presents from our relatives, and they will still be around at the end of the year. ...

Is 'buy one get one free' a crazed lunatic?

In commerce, a single phrase wields the power of a thousand salespeople. It can turn even the most rational consumers into crazed lunatics who stand in 3-hour-long lines to save $3 and punch each other in the face over pieces of cheesecake. We’re talking, of course, about ‘buy one, get one free.’ ...