Why Do I Spend So Much When Shopping Online?

Personal Finances

Both online and in-store shopping can tempt you to overspend.  The internet is designed to help you lose track of your dollars.  Of course, the internet wins for convenience.

Shopping the old-fashioned way, though, is not without merit. When purchasing items that need to fit right or that you may need immediately, you might want to head to the mall. You might even save money that way.

But, if you choose to do most of your shopping on the internet, it’s good to understand why we tend to overspend online.  Here are ten ways online retailers push us to overspend:

Why we spend more online

1. They push products strategically. The first few products you’ll see when you visit a retail website aren’t necessarily the hottest-selling items.  Sometimes, they’re just the stuff the company needs to get rid of most urgently. Most people, though, will assume the products on the site’s homepage are the most popular.  Because of this, they quickly drop one or two of these items into their cart.

2. They offer free shipping—with a minimum purchase. Don’t think the retailer is super-generous when they offer to pay the shipping costs if you spend $50 or more. They’re only luring you to spend more and it works! In other words, people will choose to fill their carts with stuff they don’t need to avoid paying the shipping fee.

3. They make it super-easy to check out. Websites make their checkout process easy to keep you buying. You could order your whole cart within minutes if you saved your info on the site. The quicker you make those purchases, the less time you have to rethink them and opt-out.

4. They offer spending-based discounts. Online retailers often offer discounts after you’ve reached a certain spending threshold. Just like the free-shipping minimum, these conditional discounts manipulate you into spending more to qualify.

5. They change their prices without rhyme or reason. Online retailers adjust their prices according to consumer and market behavior. This tactic, known as “dynamic pricing,” is designed to draw you back to the site again and again to check the going price. It also prompts you to buy before the price rises again.

6. They use anchor pricing. Retailers want you to believe you’re getting a great deal. For instance, they frequently employ “anchor pricing,” or placing items with inflated price tags right next to the one you’re looking at to make your desired item look less costly.

7. Their ads stalk you. Online retailers target you with ads based on your search history. They know what you’re into, and they can even determine your style.

8. They have lenient return policies. Online retailers purposely have looser return policies. They know you’ll consider these policies when making your purchase.  Also, you’re more likely to buy something online if you can easily send it back to the store.

9. They have a virtual checkout aisle. If you think you’ll save big by shopping online because you won’t be tempted to grab all those goodies that the brick-and-mortar stores have lining their checkout aisles, here’s a reality check: Retailers are smarter than that. They’ve have discovered a way to create a virtual checkout aisle that goes well with the stuff you’re buying.

10. They stay in touch. That subtle email reminder that you still have items in your cart is a nice way of nudging you back into buying mode. Fact is, it works. When retailers send you emails with headlines that scream “Today Only!” they get your attention.

Spending less online

By educating yourself about the most common tactics that online retailers use, you’re already better equipped at handling them. You can also follow these tips to keep your online spending to a minimum:

  • Shop with a list. Yes, just like the one you scribble before heading to the grocery. Don’t just have a look around your favorite sites. Decide what you want and need to purchase before browsing.  Most importantly, do your best to stick to your list.
  • Set a time limit. When there are no store closing hours, you can easily lose track of time.  Unfortunately, this can trigger overspending. Plus, the internet is designed to keep you engaged. One-click leads to another. Give yourself a reasonable amount of time to shop.  Once time’s up, snap your laptop shut.
  • Never pay full price. Don’t check out without doing a quick search for coupons and discounts on sites like RetailMeNot.com.
  • Shop early. You’ll find it easier to stick to your budget, and to avoid the free shipping trap when you shop early. Plus, many online retailers offer free shipping with no strings attached as long as you don’t mind waiting a bit for your stuff to show up.