Because people like the feeling of getting a discount. I don't know why, but it satisfies some part of their ego. Discounts don't change the utility of the product or the budget of the buyer or anything, other than the buyer feeling good about themself.
You are way overcomplicating it. People are not talking about comparing the discounted price with some fictional “intrinsic utility” price and your comments about the utility of the item are tone deaf and missing the point.
Advertising that you are selling something at a discount is information that your price might be lower than a competitor. Nobody likes getting a discount at store A then seeing the same item for less at store B, and as a result, people don’t care much about discounts in an absolute sense. Only that the information announcement of the discount is advertising price competition with other sellers or substitutes.
When a seller lies about the original price to claim a discount, they are banking on consumers just “believing the lie” that the fake, pre-discount price was a competitive price compared with competitors or substitutes.
People choose to believe it’s a malicious & morally wrong action for the seller to do that, to intentionally play against consumers’ penchant to seek the lowest price among various alternatives by creating a discount from an inflated reference price that is intentionally not competitive with other sellers, and to hope that it fools some consumers who trust the seller instead of doing the legwork to compare prices & learn if the pre-discount price was in line with competitors.
People just choose to believe a seller that chooses to do this is shitty and acting antagonistically to manipulate buyers. They expect sellers to be honest about sources of price competition.
A discount should be with regard to a prevailing market aggregated price, or some close & sincere approximation from sampling the prices at competitors or prices of substitutes. If the discount is in regard to some other way of setting the pre-discount price, then it’s intentionally manipulating people to play on the cognitive flaw that they will nonetheless believe the discount is in regard to some notion of a “fair market value” price level, especially in situations driven by short-term cognition.
I think expecting a seller to make sure they have the lowest price compared to other sellers is ridiculous.
It’s not a seller’s job to make sure the buyer is getting the lowest price. It’s not possible for a seller to know every single other seller’s price so I don’t see how anyone has a reasonable expectation to that in the first place.
People like to THINK they are getting a discount. They don’t care that the actually are. Clear evidence is JCPenney trying to offer people the best price without discounts:
It’s how Kohl’s and Bed Bath And Beyond survive. Consumers rewarded sellers that offer 80% off ridiculously marked up items versus JC Penney who tried to offer an “honest” market price, and they forced JC Penney to engage in “deceptive” sale pricing again.
> “I think expecting a seller to make sure they have the lowest price compared to other sellers is ridiculous.”
It’s fine for you to think that, but it means you’re just arguing with yourself, because most everyone agrees it is a fair expectation of sellers, and that when seller behavior deviates from this social norm, it is proper to view that as a manipulative or normatively condemnable seller behavior.
Sellers can’t have it both ways. You can’t act like your prices are lower by hyping them in a discount, but really be coyly saying you have no obligation to provide competitive prices and the discount reference point is purely fictional. That’s disingenuous and such a seller knows full well they are banking on tricking or manipulating people.
People care more about feeling like they save money vs. actually saving money?
If they found out they were just given the illusion of saving money vs. actually saving money who would choose the illusion? I sure as hell wouldn't it seems totally illogical.
People can search the price on their phone and compare, but many don't. There does exist a significant population that feels better getting a discount.
Businesses can set prices however they want, but that doesn't mean anyone has to buy it. But when shady pricing and sales come in the consumer feels better because they think they're saving and don't realize they are being deceived. Certainly there are lazy people, but that's entirely different no one would willingly pay more for the same service. They're only "happy" because they're being lied to. Why should we reinforce this kind of behavior?
We shouldn't, but the more efficient, cheaper, long term, structural way to fix it is to create more educated consumers. Teach children in school how to make proper comparisons, how to avoid sales tactics, how to figure out the bottom line for them.
How would you even police something like 80% off a "fake" retail price? Create a database of all transactions for all items and compare to the historical average in x amount of days? Force all sellers to maintain records of their sales to compare against, and then go around doing spot checks?
Why not just have the government buy up billboards and TV ad spots educating everyone not to fall for the discounts and to compare the bottom line number they pay, and reward sellers that offer price transparency with their business?
Never said anything about policing PRICES... The sales pricing is dirty not illegal. Businesses should be free to price things however they want, but that doesn't mean certain sales pricing isn't a dirty trick. And it's DEFINITELEY not in the same category as these other practices.
Dark UI patterns and deceptive tactics are definitely grounds for legislation though, and those are the particulars of the article and this discussion not a nebulous discussion about %50 sales.
It's shitty and takes advantage of people. Dark patterns and automatically raising prices and making it near impossible to cancel accounts... this is what people are talking about legislating. Ff you are defending those dark patterns and deceptive tactics from being legislated against you are basically taking the position of a con man or someone who stands to profit from that behavior. They aren't providing a better service they're providing deceptive business practices.
Why would you try to implement some nationwide educational campaign instead of outlawing by definition a deceptive business practice? That would be a giant misallocation of resources and not even guaranteed to help. How are you going to educate the old and succeptible? They are the ones most prone to these attacks.
What you're saying isn't just late night TV ads can use $99.99 to appeal to customers, no one has a problem with that. You're saying sure go ahead and use Dark UI patterns and straight up deceiving pricing contracts to my elderly grandma, and you have no issue with that? She shoulda been better educated? OK then... Do you also think Kevin Trudeau is a stand up guy who deserves to be in business?
>You're saying sure go ahead and use Dark UI patterns and straight up deceiving pricing contracts to my elderly grandma, and you have no issue with that? She shoulda been better educated? OK then... Do you also think Kevin Trudeau is a stand up guy who deserves to be in business?
I'm not saying this at all. My original comment was a reply to vmurthy whose comment was specifically about discounting a raised price, and my response to him states that I'm commenting about that specific sales tactic.
For the record, I am against any practice that unnecessarily hides the price one is paying or makes buttons confusing and other "dark" UI patterns. However, if the price one is paying is clearly visible, I see no reason to regulate anything else regarding that price, such as x% off or limited time offer or that nonsense.
Fair enough, though I'd say discounting a raised price is a borderline case for regulation. That is obviously deceiving and dubious at best. As I said you might feel good getting that discount, but it's an illusory savings which if people knew about they'd never choose that over actual savings, but no not illegal. So I agree with him I'd feel cheated.
The FTC does hold advertisements to their claims and that's getting dangerously close depending on their exact language
From your comment above:
"It’s not possible for a seller to know every single other seller’s price so I don’t see how anyone has a reasonable expectation to that in the first place."
So if the seller can't be expected to know their competitors prices how can the consumer be expected to keep track of all that information for all the products they buy? Additionally, sellers evaluate competitors' prices and compare them to their own all the time.
I never implied a consumer should be expected to keep track. Not having perfect knowledge of every transaction in the marketplace is a risk for all buyers and sellers. Holding a seller liable for another seller's price is ludicrous though. That's the buyer's job to do, by not giving business to a seller who isn't in line with the market (other sellers). No reason to get lawyers and courts and regulatory bodies involved.
