Price review

  • Kitchen and homeware retailer Yuppiechef is running a "4 for 3" pre-Black Friday sale.
  • It purports to gift shoppers the cheapest of four qualifying items in their shopping cart.
  • But it's an old sales tactic that will likely only save you a few rands than if you shop elsewhere.
  • And it will likely have you spending significantly more than you'd hoped for.
  • For more stories go to www.BusinessInsider.co.za.

Kitchen and homeware retailer Yuppiechef is running an eye-catching buy four, get the cheapest item free campaign in the lead up to Black Friday. The store has a wide range of products eligible for the discount, from chilli seasoning to mattress protectors and high-end pots and pans.

On the surface, the deals look impressive. Yuppiechef claims to offer shoppers the cheapest qualifying item in their basket of four at no cost. Bigger baskets are a bit more complex. Baskets of eight qualifying items will subtract the eighth-lowest price from the total, and baskets of six the fourth-lowest item.

As with other online store discounts, Yuppiechef may at times be selling products lower than competitors or than they have previously during sales like these. But the fourth product free claim doesn't always check out in the real world - and it taps into one of the oldest sales tricks in the book.

Evaluating the deals

The multiple layers of the buy four, pay for three model makes calculating how much you save on each deal difficult. But the easiest way to check just how substantial these discounts are is to compare a basket with four of the same product.

One of the most expensive products on Yuppiechef's sale is a cookware set selling for R9,999. Buy four, and Yuppiechef says you're getting one of them for free. That's a claimed discount of just under R10,000 - a massive saving in anyone's book. 

A deal of this size is likely enough to close the sale - and Yuppiechef lets you know how dramatic it is when you reach the checkout page by placing the discounts in bright red text and with a "Bulk Discount" logo.

To Yuppiechef's credit, web archives suggest it has sold the product at R9,999 since at least October last year. But competitors aren't currently selling it for nearly that much - and herein lies what some economists call a clever sales trick.

Using the maths that Yuppiechef presents, after the discount, each of the cookware sets costs R7,499.25. Quick online research shows that the same product is selling for roughly this amount elsewhere online - and you won't have to fork out for the additional items, or other products you use to activate the 4 for 3 promotion, that you probably don't need.

The same is true for a set of double-walled champagne glasses. Buying four sets to activate the sale will cost you a total of R807 - with the fourth free, Yuppiechef is claiming a total discount of R269.

But the same product doesn't sell for close to R270 at other leading retailers. Everyshop, for example, is selling them for R229 - this makes a more accurate discount in the region of R109. Or to use Yuppiechef's wording, buy four, get one roughly half off. Unless you really want eight champagne glasses, you're better off looking elsewhere.

A pack of handcrafted toffees is another example of this. After Yuppiechef's claim to give you the fourth pack free, you're paying R59.25 per pack of four. This price is lower than buying directly from the supplier - but only by R6 per pack, not the claimed R19.75 per pack. 

The trick of the buy one, get one free type deal

Buy one get one free, or in this variation, buy four and get the cheapest one free, sales are nothing new - there's evidence that points to these types of sales in the early 1900s. They are highly successful, primarily because of the persuasiveness of the word "free".

Even though shoppers may know stores aren't charities, it's hard to turn down a "free" cookware set claimed to be worth R10,000.

Economist Alex Tabarrok argues that sales like these, also called BOGOs (buy one get one frees), can be particularly profitable for stores - more profitable than 50% off type sales.

"Carefully designed BOGOs increase profits because they let the firm price more flexibly, what economists unfortunately call 'price discrimination,'" says Tabarrok.

Stores can increase prices, or make up profits elsewhere, while at the same time getting shoppers to part with far more cash than they intended. They're also a great way to move old stock, particularly when it comes to fresh food approaching its expiry date.

Although shoppers may know that no store is likely to give them something entirely for free, research shows BOGO sales are among the most popular. This is particularly true around holiday periods where people spend more money than they intend on BOGO sales and justify the additional purchases as gifts. And because stores know shoppers let their guard down at these times, particularly in the face of bold red wording like 'Free!', it increases irrational behaviour.

Economists say the best way to stay savvy with BOGO deals is to check if the price of one item is good value and isn't more expensive than competitors. If it represents a reasonable deal, make sure that the sale is "not buy four, get one slightly cheaper" before ending up spending three times more than you intended, as is often the case.

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