Consumer Blog

For even the strictest penny pincher, Black Friday usually offers sales that appear too good to resist. But our urge to spend is actually rooted in science — there’s a reason we’re driven to snag the best bargains. Here’s a look at why Black Friday is bad for your wallet…and how to be smarter about the mind games that push you to spend.

Black Friday Shopping, By The Numbers

In 2024, around 200 million consumers are expected to shop in-store and online from Thanksgiving Day through Cyber Monday, according to data from the National Retail Federation (NRF). From Thanksgiving to Cyber Monday, Black Friday is the biggest day for shopping, with 72% of people saying they plan to drop some plastic like it’s hot.

The Science Behind Why Black Friday Is Bad For Your Wallet

For retailers, it goes without saying that Black Friday is one of the biggest days of their year…their Superbowl if you will. They want to capitalize on a population of shoppers ready to spend for the holidays, so they offer some of the deepest discounts of the year. But are they the best deals?

According to Scott Rick, a Behavioral Economist and  Associate Professor of Marketing at the University of Michigan’s Ross School of Business, the deals on Black Friday really aren’t all that different from those you see any other time of year. Many retailers, he says, will label sales “Black Friday Sale” or “Cyber Monday Sale, leading consumers to think they’re getting a better price than they normally would. “Many people don’t have high “sales literacy”… they don’t fully realize the quality of the deals that are offered year-round,” says Rick. “Because we’re used to seeing some doorbuster deals on Black Friday and Cyber Monday, we tend to interpret any deals offered on those days as more special and unusual than they actually are.”

One such deal is the “doorbuster deal.” Whether it’s a television set or a bath towel set, doorbuster items are typically sold by retailers at little or no profit with the goal of luring in customers. Stores are making a bet that if you miss out on a doorbuster, you’ll still stick around and spend money on other, full-price items. “These “loss leader” products are meant to draw in lots of people, and, once they’re in the store, tempt them to also buy products that produce much more profit for the retailer,” says Rick. “And certainly, people who aren’t fast enough to secure one of the limited doorbuster items will want to buy some higher-priced consolation prizes.”

Retailers also are adept at tapping into our FOMO, or “fear of missing out.” Many items will have special prices for a “limited time” only. Or, you may see websites that have a countdown clock that shows the amount of time left for their sale. Retailers use these methods to create a sense of urgency and push you to spend. Rest assured, there are weeks to go before the holiday shopping season is over, and there will be plenty more deals to be had.

Avoid Overspending With “Psychological Speed Bumps”

If you’re like me, your inbox has been bombarded with Black Friday deals for days now. It can be hard to avoid the temptation–and that’s why Black Friday is bad for people who like to shop. However, by knowing the tactics retailers use and employing a few strategies of your own, you can keep your spending in check.

First, there’s the tried and true tactic of setting a budget in advance. Pick a limit for Black Friday, Cyber Monday or the holiday shopping season as a whole. Another piece of old-fashioned advice? Stick to using cash whenever possible, as it’s harder to part with your money when you physically see it leaving your wallet.

Just as retailers use certain mind tricks to get you to spend more, you too can employ a little psychology of your own. Or as Rick puts it, create “psychological speed bumps” that help you to not get carried away. “For instance, if there are websites that you shop on frequently, delete your saved credit card information from your profile,” he suggests. “In other words, create extra steps that might prompt you to reconsider the purchase.”

Another Black Friday best practice? Employ the buddy system and have a friend or family member with you when you shop to help keep spending in check. “My wife and I both understand that I shouldn’t be left alone to buy holiday presents for our kids,” I’ll go way overboard if left to my own devices,” Rick says.

The Bottom Line

Yes, retailers play mind games to entice us to shop…but it doesn’t have to be a one-way street. By being aware of their strategies and using a few tricks of our own, we can avoid overspending as the holiday shopping season kicks into high gear.

from our partnership with Filene/HerMoney