Common Financial Mistake : Buyer Remorse
If you have a tendency to spend money on buying things which you do not really require but end up buying them only because there is a discount available, or because there is some scheme, or because something is available with it for free, then you will suffer from buyer remorse. That is so because after you have purchased the product, you are most likely to regret it. And, mind you, this is not restricted to buying only physical or material things but even financial products, investments, insurance, bank savings, etc.
For example, suppose there is an offer of a free T-shirt on the purchase of a Pant. Now, if you otherwise do not require the pant but purchase it just because there is this offer, then you are in for buyer remorse. Similarly, you will most likely suffer from buyer remorse if you buy a useless insurance product which you do not require simply because of the gift of a free gold coin on its purchase.
Another example of buyer remorse would be discount sales. If you do not require a particular product but buy it just because it is available at some kind of a discount, again you are in for buyer remorse. Another symptom of it would be buying things which you do not require during special sales promotion season, like festivals, etc.
Advertisers and company managements know this human weakness very well and exploit it to fullest.
Another trick that companies use to sell their products is that they set some kind of a threshold. Thus, if you purchase up to a value of, say, Rs. 10000, then you get a gift voucher of Rs.1000.
There are many drawbacks to such schemes. Firstly, you have to purchase so many articles, some of which you may not really need, so that the value crosses that limit, most probably the company will not allow you to settle the discount in the current bill. In the given example, the gift voucher of Rs. 1000 will not, in most cases, be allowed to be settled against the current bill of Rs. 10,000 but against some future bill. What it does is that it draws you back to the store to cash in on the gift voucher. Once you are back in the store, it is more likely that you will purchase items whose total value crosses Rs.1000. And then there might be some other new scheme to lure you. So the cycle keeps continuing and you keep buying products which you do not require but which the company wants to sell to you do not require but which the company wants to sell to you by enticing you with gift vouchers and discount coupons.
How to Recognize Whether you are a victim of Buyer Remorse
When you see the following tendencies in yourself while saving, spending, investing or taking insurance, it is very likely that you are suffering from buyer’s remorse:
- You buy a certain item, whether physical or financial, just because there is something free available with it.
- You tend to shop more during discount sales, festival times, etc.
- You tend to shop more in stores which have certain kind of loyalty point System on the sales.
- You take an insurance policy or open a bank account because something like a gold coin comes free with it.
Steps to Rectify this Mistake
- Buy only what you and not what and not what the seller wants to sell to you
2 Concentrate on the product which you require and not on what is available for free.
3 Do not stop buying a good product which you genuinely require only because some special scheme or offer on it has been closed.
Please share your view and feel free to initiate a discussion in the comment box bellow.