Why Do I Spend So Much When Shopping Online?

Both online and in-store shopping can tempt you to overspend, but the internet is particularly designed to encourage you to spend more. This is more common now during the COVID-19 pandemic, when many people are staying home and shopping online. In fact, according to a recent Credit Karma survey, more than a third (35%) of the participants said they had made impulse purchases.

Let’s take a look at why we tend to overspend online and ways to avoid blowing our budget.

Why We Spend More Online

Here are 9 ways online retailers push us to overspend:

They offer free shipping — with a minimum purchase.

Some retailers offer to sponsor the shipping costs if you spend $50 or more. This is one way we end up spending more. And it works: Most people choose to fill their carts with stuff they don’t need just to avoid paying the shipping fee.

They make it super-easy to check out.

Websites make their checkout process super easy just to keep you buying. If your information has been saved on the site, you can order your whole cart within minutes. The quicker you make those purchases, the less time you have to rethink them and put the items ‘back on the shelf.”

They offer spending-based discounts.

Online retailers often offer discounts after you’ve reached a certain spending threshold. Just like the free-shipping minimum, these conditional discounts entice you into spending more just to qualify.

They change their prices based on demand.

Some online retailers adjust their prices according to consumer and market behavior as well as demand. This tactic, known as “dynamic pricing,” reprices products on services based on popularity. Dynamic pricing is a common practice in several industries such as hospitality, travel, and entertainment.

They use anchor pricing.

Retailers want you to believe you’re getting a great deal. Some retailers employ “anchor pricing,” or placing items with inflated price tags right next to one you’re looking at now to make your desired item look less costly.

They have lenient return policies.

Online retailers offer looser return policies than their brick-and-mortar counterparts. They know you’ll consider these policies when making your purchase and that you’re more likely to buy something online if you can easily send it back to the store.

They have a virtual checkout aisle.

If you think you’ll save big by shopping online because you won’t be tempted to grab all those goodies that the brick-and-mortar stores have lining their checkout aisles, here’s a reality check: Online retailers are smarter than that. They’ve discovered a way to create a virtual checkout aisle, full of last minute add-ons that go well with the stuff you’re buying. It’s all designed to make you drop another item or two into your cart before you realize your total is way above your planned budget.

They stay in touch.

That subtle email reminder that you still have items in your cart is really just a nice way of nudging you back into buying mode. Fact is, it works. When retailers send you emails with headlines that tout “Today Only!” and “Free Shipping on Every Order,” they get your attention. And your money, too.

Tips to Spend Less Online

By educating yourself about the most common tactics that online retailers use, you’re already better equipped at handling them. You can also follow these tips to keep your online spending to a minimum:

Shop with a list.

Yes, just like the one you scribble before heading to the grocery. Don’t just have a look around your favorite sites. Decide what you want and need to purchase before browsing, and do your best to stick to your list.

Set a time limit.

When there are no store closing hours to curtail your shopping trip, you can easily lose track of the time, which can trigger overspending. Plus, the internet is designed to keep you engaged, and one click leads to another. Give yourself a reasonable amount of time to shop, and once time’s up, snap your laptop shut.

Never pay full price.

Don’t check out without doing a quick search for coupons and discounts on sites like RetailMeNot.com and CouponCabin.com.

Don’t twist yourself into a pretzel to qualify for free shipping.

Don’t buy stuff you don’t need just to avoid a dreaded shipping fee.

Shop early.

You’ll find it easier to stick to your budget, and to avoid the free shipping trap, when you shop early. Plus, many online retailers offer free shipping with no strings attached as long as you don’t mind waiting a bit for your stuff to show up.

Give yourself some time to think about the purchase.

Ask yourself: Do I really need this item? Will it add value to my life? Allowing some time to think about the purchase could help you avoid an impulse buy.

With awareness and careful planning, you can stick to your budget even when shopping online.

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