Top 5 ways salespeople trick you

People get tricked into buying things they don’t need or buying things they can’t afford.

There is an inherent conflict of interest between salespeople and consumers. Consumers can only buy as much as they can afford, but salespeople get a bigger paycheck if they get you to spend more.

Having worked as a salesperson for five years in college, I saw a lot of tricks that convinced people to spend more money (even when they probably shouldn’t). Here are my top five ways salespeople get you to spend more than you should.

Making costs invisible

You’ve probably been offered a free phone at some point in your life. Most people are smart enough to realize that there’s some kind of catch. What is more challenging is to think like an accountant and figure out how much that will cost you in the long run. Financing costs, increased service costs, or investment fees can be hard to track. Don’t be afraid to ask questions. If something is unclear, it’s probably not going to work out in your favor.

Restaurants

Services charges are a new trick that got more popular after COVID shutdowns. Restaurants add service fees or charges. These can sometimes be as high as 20% of the check. It makes the meal seem more affordable when you look at the menu, but the bill is an unpleasant surprise. Always look at your restaurant bill before signing it. Understand if the restaurant charges a gratuity or any additional service fees. 

Annuities

Depending on the annuity, you might have invisible fees. In some contracts, you only see the benefits or the interest you will get over time. In cases like this, the insurance company invests your money and keeps the difference.

Phones

You often get a discount on your smartphone (or other smart devices) when you sign up for a contract. You may think you’d have to pay the same amount either way, but many cellular providers have cheaper rates on a prepaid plan. Before signing, check to see how much extra it costs per month.

Made up discounts

Some people love a sale but don’t think about the why or how. My favorite example is JC Penny. In a nutshell, they choose a high price for their product and then offer it at an artificial discount. The product is the same price to the consumer, but they inflate the price. A cost of $1,000 with a 30% discount is the same as a price of $700. They just don’t feel the same.

Here is how to beat anchoring. When you want to buy something, think about the highest price you are willing to pay before you talk to a salesperson or look at a price tag. Be firm on that number as your limit. When you speak to a salesperson, tell them that is your limit, and you are leaving if it is a penny more.

If you are in just a store, look at the tag. If the price exceeds your limit, set down the product and walk away. You are not going to buy it today. If the price is under your limit, congratulations, you just got a good deal.

Insurance

Almost nobody pays an undiscounted sticker price for insurance. They offer discounts for paperless billing, good driving, not filing a claim, bundling, etc. It feels much better to call it a good driver discount than a lousy driver extra charge. Currently, at Liberty Mutual, they show you the discounts before they show you the price of the insurance.

Resorts

Vacations are usually on sale. I’m a big fan of Walt Disney World, but it’s expensive. They try to make it feel cheaper by saying what a big discount you get. There is almost always some kind of sale. The same is true for other destinations like Great Wolf Lodge or Sandals resorts.

Furniture

Most furniture stores (especially those that pay on commission) post ridiculous prices. You’ll notice that the salesperson almost immediately discounts the price. Unless you need that exact item, walk away at least once.

Time Pressure

Our brains are wired to be afraid of loss. Salespeople will make you think a deal needs to happen immediately, especially if it’s a bad deal. They don’t want you shopping around or talking to other sales representatives. 

They say things like “we’re almost out of stock” or “the price could go up tomorrow.” These statements trigger the fear center of your brain. An excellent way to counter that is by activating the auditor center of your brain. You always have time to ask questions. Focus on questions that are verifiable and hard to falsify.

Try these out:

• What made you think the price will rise tomorrow?
• When was the last time the price changed?
• How long have you had this item in inventory?
• Can you tell me more about the other buyers?

Don’t get overwhelmed, and don’t make any commitments when panicking. Even small steps like running a credit check can make you feel trapped.

Cars

Espectially used cars. I can’t tell you how many times I looked at a car where allegedly another customer wants to buy it. Magically, the vehicle stays on the lot when I come back later. I talked to an unscrupulous salesperson who justified the lie by saying, “There’s a customer for every car. Someone eventually will want to buy that car.”

Solar

Read more about the other problems in solar scams. I have a funny story about a company I previously worked with. They must not have realized that I saw emails about my clients. They sent the same email, word for word, about their 1.99% financing expiring “tomorrow.” The only problem is that they sent the emails about three weeks apart, and the promotion is still running as of the publication date.

Most scams

Con artists know the more people you talk to, the more likely you will realize something is a scam. To get the money right away, they will tell you it’s a limited opportunity, or there is only room for a limited number of investors. They are tricks to get your money before you realize it’s a scam. Read more on the SEC Website.

Ignore the cost

For this trick, the costs are all right in front of you but hard to compare—salespeople present costs in a way that makes you ignore the total. For example, while buying a home, you hear your dream kitchen would only cost $210 a month. It sounds cheap, but it is actually $40,000.^[1]

Make sure you always compare apples to apples for costs. Decide what is a reasonable price and only talk in those terms. If you set out to pay $250,000 for a house, don’t even listen for the impact on the monthly payment; ask for the actual cost added to the closing price.

Cars (again)

Walking into a car dealership, you’ll hear two questions, what car do you want, and how much can you afford a month? In some cases, dealerships offer financing tailored to your monthly number. The problem is that you might get stuck in a seven-year loan to pay for a $60,000 car. It doesn’t feel over budget because your monthly cost is the same, but you might feel that way after seven years of a car payment.

Houses

Because houses get financed over a long time (30 years for many buyers), significant numbers of front only make the monthly payment a little bit bigger. Just remember that payment will last for a long time. 
If a realtor says $10,000 is only $50 a month, ask if they be willing to give you $50 a month to make up the difference.

Phones (again)

It sounds cheaper when it’s just a few dollars more to get the best phone. Remember those choices add up and eat into your budget EVERY MONTH.

Buy now, pay later

“Buy now, pay later” is a trick to get people to buy things they can’t afford.

Getting this offer makes some people forget about their budget or bank balance. They are optimistic that they’ll be able to pay it off in the future, but in reality, all the money problems you have today will follow you and show up when the payment is due.

Compared to “buy now, pay later,” the better choice financially is “save now, buy later.”

Vacations

Many vacation packages only require a small deposit to reserve and the rest to get paid on your stay. In some cases, resorts offer financing. Financing fun is usually a mistake that causes people to spend more than their budget and regret it after it’s too late. Save up first so you can understand how the missing money feels. Then decide if it’s worth it for your dream vacation.

Fun purchases

Televisions, gaming consoles, boats, RVs, and things we don’t need to survive. It’s easier to justify spending if you don’t have to deal with the consequences of paying for a while.