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When it comes to consumption, we’re all sinners to a certain degree; but some people are incorrigible. Consumers literally piss away hundreds of billions of dollars every year. There are thousands of thriving enterprises that make it their business to take full advantage of our collective consumption habits. Retailers and finance companies study us like lab mice and take full advantage of the predictable behavior of the average consumer. They probe us for our weak points and develop pricing models and sales strategies to make a buck from our follies that they obviously know us better than we know ourselves. From their perspective, the ideal sucker consumer exhibits many of the following traits:
Procrastination
Some consumers always wait to the last minute to book hotels or airline tickets that can double the cost of their vacation. The travel industry is happy to accommodate procrastinators with special premium prices like rack rates for hotel rooms and 300% price markups for last minute purchases of airline tickets. They postpone taking care of that leak in the roof till they have to deal with dry rot. They forgo routine dental care only to fork over thousands after tooth decay sets in. Everyone loves a procrastinator, they are ultra profitable.
Embarrassment:
This one might surprise people. But some folks don't like to bargain because they consider it gauche behavior. Some people can’t even bring themselves to say no to a car sales man or a charming sales girl who earns a hefty monthly commission for her skills in marketing overpriced perfumes. Others wouldn’t even consider taking a two-for-one coupon to a restaurant. If you feel that saving is somehow beneath you, get ready for a life of fleecing.
Ignorance:
The majority of consumers don’t read contracts before they sign them. They get involved in transactions that they can’t understand. They fail to comparison shop or do a little research before buying big ticket items, cars and homes. They don’t seek out advice from friends and relatives and don’t take the advice when it’s volunteered. They go out there in the big bad marketplace without having any idea what the right price is because they haven’t bothered to do their homework. How many times have you seen someone tell you that they leased a car and it was a great deal because the payment was affordable?
Forgetfulness:
There are tens of millions of consumers who pay their bills late and the finance industry tips its hats to every customer who ever forgot to pay a bill on time. To figure out how much this ends up costing consumers, review the balance sheets of banks and see how much money they make in fee income. Many banks couldn’t survive without their income from late charges. The same kind of consumer who incurs late charges is more likely to lose track of when that credit card teaser rate expires. And retailers have been high-fiving each other for years as they extend 0% interest offers that have clauses with a single late payment triggering 22% interest from the purchase date.
Impatience:
Many of us have to possess the latest and greatest even if it means camping overnight to pay full price for the latest iPad. Even though we all know that certain items can be purchased at steep discounts on sale, we can’t bring ourselves to wait for an opportunity to buy an item on sale.
Carelessness:
They neglect to change the oil or take in their car in for regular maintenance. They don’t turn off the lights when they leave a room and they let their food spoil in the fridge. Most people are careless to a certain extent but some people make a career of it and it shows in their financial balance sheet. I used to know one of those people - moi. But once I came to terms with how careless I was, I started paying serious attention to the cost of my bad habits and I’m happy to report a little improvement.
Impulsiveness:
Because so many people suffer from impulsiveness, the retail industry takes full advantage of this particular malady by placing frivolous items at their check-out counters. Some products are actually designed and marketed to be sold to impulsive consumers. Take tourist souvenirs and trinkets; you never realize how corny that voodoo doll is until you unpack your bags when you return from vacation and find 5 of them staring at you.
Many consumers can save tens of thousands of dollars if they’d just take a deep breath before taking out their credit cards or write out that check. If they’d just take a minute to contemplate why they’re buying something - they’d walk away without spending a dime.
I remember the day I came to terms with how impulsive I was. I was at on vacation with my brother’s family and my five year old niece asked me a simple question - “Why do you buy things in every store you enter?” I couldn’t answer her question but I’ve never forgotten the lesson she gave me.
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