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July 10, 2021

Which do you prefer when shopping: Getting more or paying less?

When evaluating a purchase, is it better to get more or pay less? Take shampoo, for instance. Would you choose 33% off a favourite product or opt for the same product with 33% more volume?

Most consumers view these options as essentially the same proposition, but they’re not, according to the Economist. The discount is by far the better deal.

As the Economist puts it, most shoppers are “useless at fractions,” and generally prefer getting something extra free to getting something cheaper. Shoppers routinely bite on bulk offers that are poorer buys because they do the math incorrectly.  

Most don't take into account that dropping the price by a certain percentage is a larger absolute change than increasing quantity by the same percentage.

In a recent study, researchers asked undergraduate students to evaluate two deals on loose coffee beans — one with 33% more beans for free, the other at 33% off the price. The students viewed the offers as being equal, which they’re not, again failing to take advantage of the discount.

In another experiment, the researchers moved 73% more hand lotion when it was offered in a bonus pack than when it carried an equivalent discount.

Can't (or can't be bothered) to do the math? Here's a handy primer on discounts like BOGOs and multiple offers. Or have a look at Math at the Mall for some real remedial work.

Do you do the math when you shop or is the big bottle often too tempting?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...