Why do we feel such a strong desire to get a deal—even when we don’t need what we’re buying?

Book Review: ‘Bargain Fever’ by Mark Ellwood

Why do we feel such a strong desire to get a deal—even when we don’t need what we’re buying?

LAURA VANDERKAM

Nov. 1, 2013 4:42 p.m. ET

Sales racks were once muted offerings, tucked away in the back of stores. But they’ve become the main draw. In 2011, retailers sold 40% to 45% of their inventory at a promotional price, Mark Ellwood notes in “Bargain Fever: How to Shop in a Discounted World.” Only 10 years earlier, they had sold 15% to 20% that way. “In just a decade,” he writes, “sales of sales more than doubled.”Other statistics are equally striking. The proportion of Americans who buy all their clothes on sale rose to 23% in 2011 from 16% in 2007. Some 20% of Americans earning more than $150,000 a year refuse to pay full price. The discounts of “Black Friday” have made it almost a holiday in itself, and many stores have begun opening early on Thanksgiving (now known as “Gray Thursday”).

So what happened? The tepid economy is partly to blame, but so is the Internet. Now that shoppers can compare prices instantly, seeking a deal no longer carries a stigma, which isn’t a bad thing. But there is a disturbing side to our sale-obsessed culture that Mr. Ellwood doesn’t fully probe. Why do we feel an overwhelming desire to get a deal—even when we don’t actually need what we’re buying?

Bargain Fever

By Mark Ellwood
Portfolio Penguin, 278 pages, $26.95

As a brisk tour of the quirks of retail, “Bargain Fever” is fascinating. I was delighted to see a thesis of mine confirmed, that frequent-flier programs won’t drive airlines bankrupt because “most male customers never want to cash in those miles. Their tallies are noted with preening pride, a manhood-enhancing status symbol that they’re unwilling to deplete.” Mr. Ellwood also delves into the world of extreme couponing, profiling Rachael Woodard, a preacher’s wife in Florida whose business, the Coupon Clippers, grosses seven figures by selling coupons that she has cut out of newspapers and mailers—even though many coupons explicitly say “Void if Sold.” (She’s being paid for the labor of cutting and mailing, Mr. Ellwood notes.) Entrepreneur Nancy Kremin sells a pocketbook specifically for coupons called the Coupon Wallet. The original was 3 inches wide; she scaled it up to 4 inches when customers told her that they were keeping more coupons on hand. Such details keep the reader going through the author’s cornier attempts at humor. The dopamine rush from sales is called “buyagra” for the brain; I lost track of the Kim Kardashian references that Mr. Ellwood threw in to show how with-it he is.

But the book’s bigger problem is a muddled message. Mr. Ellwood’s thesis seems to be that “there is never been a better time to be a shopper”: His tone presents deal-hunting as a sign of intelligence, not indigence. Yet much evidence in the book makes clear that, instead, retail is a game of cat and mouse, and stores often merely make us think we’re being clever. Perhaps part of the reason so many unneeded purchases pile up in our homes and storage spaces is that we no longer know how to tell a good deal from a good value.

Stores aren’t in the business of losing money intentionally. This is why, as Mr. Ellwood documents, many goods sold in outlet malls are now expressly created as lower-end versions to be sold at outlets, rather than being unsold goods from the higher-priced stores. It also explains why department stores continue to flood newspapers with coupons. Mr. Ellwood quotes Macy’s chief financial officer Karen Hoguet saying “People love these coupons. They love thinking they got us.”

Shoppers’ fondness for this delusion was famously overlooked by former J.C. Penney CEO Ron Johnson. Before he took over in 2011, less than 1% of revenue came from full-price items. The price was not the price: It was a number dreamed up to position goods as a bargain. Mr. Johnson eliminated most sales and discounts at the stores, and then lost his job because he had the audacity to believe his shoppers weren’t so dumb as to think that a $20 pair of gloves marked up to $40 and then sold at 50% off was actually a deal. Turns out he was wrong.

Reading “Bargain Fever” from this perspective—that our animal brains can’t resist bright, shiny sale tags—makes for a sobering experience. Sometimes we really do get a deal, but just as often retailers figure out how to move us, puppetlike, to stand out in cold parking lots when we’d probably be happier at home with our turkeys.

—Ms. Vanderkam is the author of
“All the Money in the World: What
the Happiest People Know About Getting and Spending.”