Why are people willing to pay full price at a store when someone is selling the same item for half off?

Question

Is it a trust issue or something else?

So in other words psychology is the key component here.

Answer 1

It's called stupidity!

Answer 2

Price is for some a trade-off against time. The more busy and rich you are, the more you value convenience vs money. Shopping around, gathering info, takes time; even gonig from one store to another when you know the other is cheaper takes time and costs petrol.

Very few people will go from store A to B to C to compare prices and then go back to A.

Notice how this behaviour changes as the price of items rises. If you discover you want 1/2 a litre of milk, likely you will buy it in the supermarket you usually go to, or if it's urgent the nearest convenience store. If you are buying a washing machine, you are much more likely to compare prices and quality by phone or on the Net before choosing which and where. If you are buying a house you will certainly take time over and spend money on the decision.

Also, be very aware about the concept "the same item". One answerer mentioned expiration dates. For some people, an item marked sell by Oct 5th is not the same as one marked sell by Oct 8th, or a JVC videotape is not the same as a TDK videotape.

Answer 3

Part of it is impulse; you walk into a store and see something that you had no intention of purchasing when you entered the store, but you buy it on the spot because it is something you think you want and you want it now, not the day after tomorrow.

Part of it is the assumption of asymmetric information; when buying from a private party, potential buyers wonder if the seller wants to sell a brand-new item only because it has a not-immediately-apparent defect of some kind.

Part of it is leisure time valuation. You have a choice: buy the item now or spend time researching where it can be had for a lower price, going there, and buying it. If you choose the former, it means that you value your leisure time higher than the expected savings.

Part of it is option value. If you purchase an item in a store, you usually have an option to return it. If you purchase the same item from a private party, there is no option; the sale is final.

Answer 4

Trust is an important matter, whether for the quality of the product or the after-sale, but the act of buying something is not exclusively an economic act, there's also a social component, and meting familiar people on a regular basis can be more important than getting bargains.
Which is why shopping in small shops usually feels better, and that's why corporations marketers are constantly trying to "individualize" customers through various techniques.

Answer 5

I think that it is a reliability issue. I know that JCPenney's wants me to come back to their store. I also know that they purchase their products from professional mass producers. They have something to lose if I don't shop with them again. Also, if it breaks, I know that JCPenney has given me a warranty or will let me return it.

However, an independent person may not care if I am pleased with the product. They may ba a fly by night operation that has moved on once they have scammed a group of people in a certain area. Then when I am not pleased with my product, I have no recourse to get a refund. Also, there's may not be the same quality.

Answer 6

There are many factors that forces a consumer to do this, some of them are

1) Reputation of the store where you are paying full
2) Quality of the product sold by that store
3) Convenience for the consumer to shop at that store
4) Transportation cost to shop from the far off place
5) Doubt in consumer's mind about the quality of the product which is at sale for half the price

Answer 7

It's probably more a convenience issue...people tend to shop at places they're familiar with, and marketing types know this all too well.

Stores with a dedicated clientele will charge higher prices, while stores looking to increase clientele will have lower prices.

The irony is that the the stores with lower prices will fall all over themselves to raise prices should they happen to increase their clientele.

That's "supply and demand" in a nutshell. That's why Wal-Mart is content to charge the lowest prices in order to increase clientele base even at the expense of their own employees' wages.

Answer 8

The quality of the goods being sold at half off, may have been compromised. Either they've stayed too long on the shelf, nearing their expiration date or not the exact quality of the other.

Answer 9

I have known people to buy stuff in a more expensive shop,even though you can get the same thing in another shop cheaper,so that they can say that they bought it in the well known shop.

Answer 10

when you get right down to it yeah i think 10% trust issue and 90% pride. its kinda sad the whole keeping up with the jones crap.