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(THE CANADIAN PRESS/Jacques Boissinot)
(THE CANADIAN PRESS/Jacques Boissinot)

Shopping

Five tricks companies use to part us from our cash Add to ...

It's the final countdown. Canadians everywhere are flashing plastic in malls and box stores. In fact, roughly one-third of the nation's shoppers expect to still be hunting for that perfect gift right up to Christmas Eve, according to a survey released last week by Ipsos Loyalty. And while Canadians estimate they'll spend between $500 and $1,000 this year, including gifts and decorations, roughly half expect to go over budget.

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According to Robin Lewis, co-author of The New Rules of Retail, consumers hold power over businesses due to the abundance of choice on the retail landscape. Yet we still fall prey to their retail tricks.

Don't wallow in buyer's remorse. Jennifer Argo, a marketing professor at the University of Alberta School of Business, knows what makes us spend better than almost anyone. "I know the tricks of the trade and I also fall prey to them constantly."

To avoid spending more this holiday, smart shoppers should keep these pitfalls in mind.

1) Rhyme and Buy

Coca-Cola. Lululemon. Hubba Bubba. Say those brand names out loud. They all have a certain musical quality to them , and that's intentional. There's a reason why companies spend millions of dollars finding the perfect brand - a lousy name can sink a product. Consumers are highly influenced by names with a repetitive rhyme, says Dr. Argo, who published a study on the subject in the Journal of Marketing this fall. For instance, when people were given two samplings of ice cream, one with a rhyming name and one without, they gave the brand that rhymed a higher rating - even though, says Dr. Argo, "it was exactly the same ice cream, literally scooped out of the same container at the same time." The same experiment also worked for cellphones. When the mobile's name rhymed, participants asked for different extra features - in this case, more choice of ringtones, over extra memory. In other words, with a melodic name, Dr. Argo says, people became less demanding of the product, willing to spend more for a cheaper feature. "It's crazy," says Dr Argo. "But we've probably been socialized [since childhood] to like it. And if you think about it, they do sound nice."

2) The Liar's Price

According to a new study by Dr. Argo, if you get a lousy manicure yet still praise the aesthetician, it's a bad habit for your pocketbook, and your friends. "When you lie and you know you are not supposed to, that discrepancy makes us feel bad and we have to fix the situation," she says. After lying, people often leave a bigger tip, pay more for service, and even recommend it to friends. "If you are dishonest, it's expensive," concludes Dr. Argo. "And you don't want to be recommending to your friends a really bad service provider."

3) People Power

Kids, friends, dates and strangers - they all influence our purchasing decisions in different ways. Need batteries at the checkout line? If a stranger is standing nearby, shoppers are more likely to pick the expensive brand, Dr. Argo's research has shown. Another study from the University of Vienna followed parents shopping with their kids, and found that mom and dad underestimated - by about half - the number of items tossed in the cart because their offspring asked for it. (The study's authors recommended putting your child in the grocery cart, facing you, so their view of low-level snacks was restricted.)

Dr. Argo has also found that when an attractive salesperson touches a product, shoppers are more likely to buy it. And, another study to be published next year in the Journal of Marketing Research has shown that men who shop with their friends spend more money on products; women tend to spend the same amount as their friends or even less. Shoppers who are more individual, self-focused, says Dr. Argo, "like to bolster themselves in front of the group - it's a tendency to show off."

4) Location, Location, Location

Companies often manufacture three similar products, priced low, medium and high. On the shelf, consumers will usually choose the middle item, even though, as Dr. Argo point out, there may be no real difference with the lower-price version. Putting a stack of items in a display right out in the middle of the aisle also make shoppers think sale - even if there isn't one. "It basically catches your eye, so then you suddenly feel, 'Oh, I should get that too.'"

5) The Cost of the Cool Factor: Walk into an Abercrombie & Fitch store and the place is like a nightclub, dimly lit with loud music and an attractive sales staff - it's a hip hangout for their target youth market. Starbucks has long employed the same strategy, offering a European-style, customized experience. "The retailers that are winning and surviving go beyond great products," says Mr. Lewis. Is it manipulation? Only if consumers don't realize what they're really buying - a personalized service for that $4 coffee. "It's like Disneyland," she says, "Where people pay not just for the ride but for the experience."

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