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3 traps to avoid when you go shopping
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4 min. read

It is no accident that we sometimes spend more than we planned to when we go shopping. Learn about some ways retailers use to encourage you to spend more and how you can make smart choices in your spending.

Key takeaways
  • Paying for a purchase through instalments is a form of borrowing. There are late fees or charges involved if you cannot meet repayments, making the purchase more expensive.
  • Take your time to consider carefully before making a purchase – you will be less likely to buy something you do not need.
  • Overspending adds up. Not only will you be stretching your finances at that point, you also hobble your financial goals for the long-term future.

How do retailers lull you into spending more?

Many of us are enticed by the loud advertisements on shopping events, especially when it comes to the last few months of the year – think 10.10 Sale, 11.11 Sale, Black Friday & Cyber Monday.

There just seems to be so many bargains to be scored! But are there, really?

Giving the appearance of affordability – buy now, pay later

Instalment payment plans or buy now, pay later options may make pricier options appear affordable by spreading out payments. Instead of paying $1,200 now for a mobile phone, paying $400 each time over three instalments is more appealing for many – except perhaps we could have only afforded a $600 mobile phone with our budget. (Find out the real costs of instalment payment plans here.)

To be fair, instalments are not bad, in and of themselves. In fact, most of us would need to pay by instalments at some point in our lives, such as for our home.

The key is to keep your purchases to what you can afford because instalment plans are loans and do not reduce the cost of your purchases. It may be an “interest-fee” way to make that unexpected purchase, but if you miss any payment, there will be late fees or charges (making the purchase even more expensive).

Unless you are certain you can and will repay on schedule, it is better to avoid relying on them, especially since you may have the tendency to splurge. Before you know it, you may have overstretched your finances by chalking up instalments for multiple purchases.

A 2020 survey in Singapore showed that 27% of respondents admitted to being financially worse off when using “buy now, pay later” schemes. Impulse buying was the most common mistake cited, followed by buying an item that was more expensive than they would otherwise have. Some respondents said they struggled to pay for other expenses, as a result.

The rule of thumb for shopping is to take time to ask yourself a few questions:


  • Do you need the item or want it?
  • Are you willing and able to pay for it at one go instead of opting for instalment?
  • What is the true cost of paying by instalments? How likely will I be able to make timely repayment of these instalments? Do I end up paying a higher price (e.g. additional costs if I miss payment)?

Usually, leaving the store or website and waiting for three days before making a purchase will give you clear answers.

Preying on FOMO

With online shopping, the temptation to splurge has become a daily struggle for many.

E-commerce platforms feature flash sales or daily deals, coupled with the notice that “3 customers are looking at this item now”, or “Only 4 units left”.

When we are acting under time pressure, the fear of missing out (or FOMO) on what is presented to us as a scarce steal overshadows all else.

One quick way to avoid landing in a position to act in haste: Do not use your main e-mail address for your shopping accounts; set up an e-mail purely for marketing materials and do not link this account to your e-mail app. That way, you will not see what “special deals” there are on the various e-commerce platforms you are on. Out of sight, out of mind!

Ideally, take time to do your research when you have your eye on something. Compare prices across retailers. Better yet, monitor prices over a period. You may find that the large-scale shopping events may present negligible savings.

It is also no secret that retailers monitor your browsing activity and use it to their advantage by pushing similar or complementary products your way. Ditch your shopping apps and turn on the private or incognito feature on your browser when you next shop online to cut out temptations!

Counting on penny-wise behavior

Ever wondered why there are usually three sizes of popcorn, iced latte, or fries?

Merchants are not being thoughtful about differing appetites. The medium size option has been offered as a decoy, such that the large size, usually just a wee bit more expensive, appears great value for money.

The lure of free shipping with a minimum purchase or purchase-with-purchase deals uses the same trick. In order to score a freebie or a discount, we have all searched high and low for extra items (things we never needed, let’s be honest) to add to our shopping cart. Such (unnecessary) extra items may even end up costing more than the freebie or discount that you can gain.

Making a shopping list could help you stay away from distractions merchants shove in your face. Alternatively, make it a point to compile a list of items instead of going shopping as and when you need something.

A small adjustment you could make to your online shopping routine is to carefully go through your shopping cart. Are you sure you want to buy all the items? Are there hidden charges?

The bottomline

Knowing how retailers go all out to persuade you to part with more money is bagging a deal in itself. After all, that money you did not spend because you saw through their tricks can be put to better use, such as saving or investing.

It is easier to curb an itch to turn to retail therapy when you have clear financial goals (read more about how to set goals for yourself here, and try our tool for reaching for your own financial goals here).

Last updated on 13 Jul 2021