How to avoid the Black Friday pitfalls

What is Black Friday?

Whether you’re in the US or the UK, Black Friday is fast becoming the biggest and best day in the shopping year to hunt for a bargain. Though its roots lie in America, the pre-Christmas shopping frenzy made its way to the UK back in 2010, and while the discounts are traditionally on for one day only, some shops such as Amazon, Argos and Currys, extend their discounts through early deals.

Why would we line up at the crack of dawn in the cold fall weather and wait for the shops to open? Because we are thinking that we are getting the best deal out there. But, of course, companies are using the “sale” as a come-on to lure us into making ‘bad’ decisions and to leave the store with a £400 coat we’ll rarely wear, an espresso machine we’ll never use, a pasta making machine that will never come out of the box and a stainless-steel toaster – because it was ‘half price’ – even though the one we have works perfectly fine.

Why do the shoppers act ‘irrationally’ on Black Friday where wildness rises to dangerously high levels? Why does Black Friday lead shoppers to grab and fight, especially when the stakes are often as low as 40% off stainless-steel toasters?

Over the last few decades, behaviour economists, such as Dan Ariely, have suggested some pitfalls to avoid on Black Friday.

Get enough sleep – ‘Depleted’ shoppers can’t be ‘rational’

People are the most vulnerable when they’re tired and overwhelmed. Behavioural scientists call this state “depletion.”

In a state of depletion, people just don’t have enough willpower to resist temptation or the cognitive abilities to make complex decisions. The shoppers arrive sleep-deprived and stressed, looking for ‘the best bargain’ and for businesses, it seems like taking sweets from a baby. Only here the ‘baby’ doesn’t resist at all. So, make sure you have enough sleep if you have big plans for Black Friday.

What’s another £10 after the first £500?

It ‘hurts’ to spend money. There’s pain in parting with £13.99 for Mr Beams LED Spotlights. However, after spending £500 on a new Panasonic 40-Inch, full HD with Freeview model TV, the pain one feels parting with a £13.99 for MR Beams LED Spotlights is practically gone.

Nobel Prize winners Daniel Kahneman and Amos Tversky explain that people are often ‘loss averse’ and do not like to lose money. However, once the Pandora box of ‘losing’ or spending money is open, this ‘loss aversive’ cautious spenders can quickly become big spenders. Many shoppers tend to go for the ‘big bargain’ first (e.g. that 50 inch TV we always wanted) and after the big purchases, every £7 t-shirt will not hurt. Starting with small purchases may save you some money.

Is there a guilt if everybody’s doing it?

Businesses want overcrowded shops. Not just because they want lots of wallets in, but because crowds change people and remove all sense of guilt.

Consider a scenario where you feel guilty buying another game console for your child. Then you find yourself standing next to the customer that have flat screens in their trolleys. Suddenly, the painful experience of parting with money becomes a joyous spending spree because of the realisation that everybody is doing it, and some of us are actually ‘doing it worse’. Guilt is good in this context and it will save you money.

Two words to remember: net cost

The damage from Black Friday won’t be found on your receipts from shopping centres and shops. To appreciate the net cost of your shopping trip, remember to include the petrol you use commuting from sale to sale, the ‘free’ shipping and handling costs, and the best deals of one-year warranties.

Dan Ariely argues that we tend to ignore net cost when we shop because we’re focused on the bargain story. We all love to tell stories about our bargains – “This suit was 80% off, EIGHTY!” – precisely because we don’t know what most items are really worth. Narratives fill the space where our knowledge should actually be. Therefore, if you drive 40 minutes to a sale and you sit in a car park line for another 20 minutes, that’s an hour of your life and petrol gone. Those are the real costs counting against that magnificent 80% discount you found inside. But, that hour might not be part of the story you tell yourself and your friends and family later.

Things to remember this Black Friday

So, don’t get too tired, use a calculator, decide what you really want and need ahead of time, and don’t get brainwashed. Yes, Black Friday can be fun. Yes, Black Friday is a day with a possibility of great deals. But Black Friday is also a trap that’s very easy to fall in to. Happy and responsible shopping everyone!