The Psychology of BOGO

credit cardThe Psychology of BOGO

Quick: Which of the following represents the best deal?

  1. $200 off a $999 TV
  2. A $35 pair of sunglasses, marked down from $50
  3. Buy one shirt for $60, get the second for 50% off

If you picked #2, you are correct.

#2 is a 30% discount. #1 is a 20% discount. #3 is a 25% discount.

Most consumers will go for #3. That 50% makes it feel like the largest discount.

BOGO at 50% Off (Buy One Get One at 50% Off) has become retails favorite discount method.

Some stores even offer BOGOF (Buy One Get One F*r*e*e) which is equivalent to a 50% discount.

BOGO works best for most retailers because customers love seeing that 50% off number, even though it’s not a 50% discount.

Retailers also like BOGO because consumers are forced to purchase two items in order to get that discount. That means more money is coming into the store and more items are leaving the store.

For consumers, BOGO is sometimes not as good as it sounds. If you purchase two shirts, one at $50 and one at $40, the consumer gets the $40 item (the lower priced item) at 50% off ($20) which comes out to only a 22% total purchase discount.

Read the entire article at:

Leveraging the Psychology of Discounts to Make More Money

Read about BOGO from the retail point of view at:

Buy One Get One Free (About Money)

Read more about BOGO from the consumer point of view at:

Why BOGO is Typically A No-No

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