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  • Posted August 19, 2019

Beware the “Great” Deals

I have to hand it to the cell phone companies and cable providers – they are masters at getting us (consumers) to spend more than we want. I’m talking specifically about their ability to up-sell us, we buy services we may not need/want but don’t turn down for fear of missing a fantastic opportunity to “save money”.

Here are two examples, one for cell phones and one for cable tv. Let’s use a cell phone company offering two phones for the purchase of one. When you read the fine print you’ll see learn that you’re on the hook for (2) years of payments, although at 0% interest; but only if you have the best credit. Additionally, if you cancel the 2 year contract early, you’re responsible for paying for BOTH phones.

So you are locked in with this cell phone company for (2) years, or your on the hook for (2) cell phones. What I’ve found is many people don’t “need” a new phone (much less two), but see this as an amazing deal so lock themselves in. Yes, it’s only “X”/mth, but if you’ve ever said I can’t afford to save for retirement this could be an example of why. Not the price, but what it represents – the ability to be caught up in FOMO.

Let’s look at cable tv providers. Many areas in the country will only have one or two options, so options are limited. However if we are honest with ourselves, how many of us still use landlines – especially now that they are digital? There was a time when having a landline made sense, they were separate from the cabling that brought you television and internet; so if there was a service interruption to the TV you still had a phone. Now everything is digital – you lose your internet you’re losing your home phone too.

Cable companies will encourage you to purchase a double or triple play, because it will “save” you money. Their argument usually goes something like this (in my experience) – you’ll pay “x” for just internet, but for a few dollars per month more you could get internet and phone. Seems reasonable, after all what’s a few dollars? Just like the above example, this trains us as consumers to take deals that aren’t really deals – we’re spending money we had no intention of spending on something we’ll more than likely never get our money’s worth from.

This may not apply to everyone, but is has applied to the majority of people I have worked with – regardless of income or wealth. Next time you are offered a “deal” hit pause, give yourself some time to run the numbers and see if it really makes sense for you. One of a sales person’s biggest tools is the use of scarcity – “limited time offer” is one example. Anthony Brebion has a great article on this: “5 Clever Scarcity and Urgency Examples to Boost Your Conversions“. He’s writing for sales people, but I encourage every consumer to educate themselves.