Every time you buy two items and get a third item half price, or add a few dollars to an online order to guarantee free shipping, you “save.”
Saving is a mix of “spending” and “saving”: spending more to trigger savings.
But make no mistake, experts say: Saving is essentially an expense.
“It’s always more spending. It doesn’t always save more,” said Jeff Galak, associate professor of marketing at the Tepper School of Business at Carnegie Mellon University in Pittsburgh.
Spaving has been in the news lately. This seems like something new: the term rarely appears in this publication. It’s not in the Merriam-Webster online dictionary. Type it into your word processor and watch your spell check erupt in protest.
Other ways to save: Visit USA TODAY’s coupon page to discover deals from thousands of vendors.
“Spaving”: a concept as old as the shopping center
The concept behind spacing, however, goes back a long way.
“Spaving, aside from being a terrible word, is not a new idea,” Galak said. “These promotions have been around forever.”
Here’s the basic concept: a merchant entices a customer to spend a little more, or a lot more, by offering a discount as a reward. Buy a third item, or a fourth, or a fifth, and get the last one free. Add ten more dollars to your cart and that $5 shipping fee will disappear.
Who needs a gallon of extra virgin olive oil? Maybe so, at the right price.
Customers may see many spaving offers this summer. Inflation has pushed prices up. A dozen eggs cost about double what they did in 2019. Overall, consumer prices increased by nearly a fifth between 2019 and 2023, according to federal data.
Consumers are resisting. In response, retailers are offering deals.
Fast food chains are relaunching value meals following consumer backlash over reports of $15 Big Macs.
Target and Walgreens have announced price drops for the summer. More and more customers are choosing discount store brands.
Spending less on the same Happy Meal you bought a week ago is a no-brainer. On the other hand, spaving can quickly get out of control.
“Savings” can lead to overspending and unnecessary purchases
The problem with thrifting, experts say, is that it can lead a buyer to spend too much on something they don’t want, don’t need and won’t use.
“It’s always good to save money. The problem is when you spend money you wouldn’t have spent otherwise,” said Kimberly Palmer, personal finance expert at NerdWallet.
Palmer herself recently succumbed to a savings offer.
“It was buy one get one free,” she said. “I never intended to buy a second jersey. It was for my daughter. I went ahead and purchased two.
The second jersey was free, so Palmer got a good deal, right?
Well, maybe not. She paid full price for the first shirt. Without the savings agreement, it would have resisted a reduction. In the end, she said, “I spent more than I wanted to. »
When is spaving a good deal?
According to experts, there’s really only one type of savings offer that guarantees a good deal: one that makes you spend less money in the end.
“Let’s say you go to checkout and your cart is $5 lower than the minimum to save you $30 on shipping,” said Cassandra Happe, an analyst at WalletHub. “So maybe spending $5 to get free shipping is a good idea.”
Most of the time, though, saving makes you spend more: that’s the bottom line, at least from a retailer’s perspective.
And if you spend more, do you always get a better deal? It depends.
Before you commit to buying more of something to trigger a discount, experts say, ask yourself these questions:
- Is this something you would buy anyway?
- Can you afford it?
- Are you going to use all of this?
- Is it perishable?
- Do you have space to store it?
Stocking up on laundry detergent pods, frozen steaks or paper towels at volume discounted prices might make all the sense in the world.
“My husband and I both work from home,” Happe said. “So basic necessities like toilet paper, stuff like that, we buy them in bulk now, because we know we’re going to use them.”
Be careful, though, if you see a generous deal on non-frozen corn on the cob, bananas or steaks. Or anything with a short shelf life. Or anything your family might get tired of consuming. Or anything you wouldn’t buy anyway.
What is the psychology behind spaving?
The appeal of spaving is obvious: consumers like to think they are saving money.
“You get this temporary emotional feeling because you feel like you got a good deal,” said Kris Yamano, a partner at Crewe Advisors in Scottsdale, Arizona.
The problem arises, Yamano said, when consumers want to save money so much that they end up spending more, and on things they won’t use.
“You walk into Target and you’re just there to buy dish soap,” she said. “But then there’s a deal in the next aisle, and you leave with a cart full of things you don’t need.”
The arithmetic behind spaving can be tricky.
Let’s say you buy three pairs of shoes, with the third being 50% off.
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A quick calculation reveals that you’re not really saving 50%. You only save on one item. If each pair costs $50, you save $25 on the entire purchase, reducing the bill from $150 to $125: a savings of about 17%.
What if the third pair only cost $30? In a typical spaving deal, the retailer gets the discount on the lowest-priced item. Now you only save $15, bringing the price down from $130 to $115. Your savings fall below 12%.
A consumer can figure it out with an iPhone calculator. But few of us have the time to do the math.
“A lot of times with spaving, it’s a high-pressure situation,” Palmer said. “It’s going to expire in the next few hours, at the end of the day, so there’s some urgency.”
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Here are some more expert tips for how to shop – and “save” – without spending too much:
- Make a shopping list and stick to it.
- Set a budget and don’t waste it.
- If you’re considering a savings offer, do the math.
- Before committing to a savings agreement, take some time to think things through.
“I’ll give myself 24 to 48 hours before I buy something,” said Jack Howard, financial wellness manager at Ally Financial. After that pause, she said, “If it’s still on my mind, then it’s okay.”