This Week in Your Wallet: September 11, 2012
Before I launch into the financial news of the week, I want to start by acknowledging the date. There’s a bright blue sky overhead here in New York, and I’ve heard many people say how much this makes them think of that fateful day eleven years ago. Whether today you’re missing a friend, a family member, or just a time when life was different, I’m thinking of you. On a slightly lighter note, I know that 9/11 forever changed many birthdays and anniversaries (my parents’ wedding anniversary was September 11th), so if you’re trying to celebrate a happier milestone today, I’m thinking of you, too.
For today’s newsletter, I have technology on the brain. I think it’s probably because of yesterday’s widespread internet outages — which, by the way, affected jeanchatzky.com, so if you were trying to access my site, my server was one of the millions that were down for several hours yesterday afternoon and early evening. (It looks like everything is up and running smoothly today, though.)
At any rate, there have been several stories in the news lately about how technology is affecting yourwallet. For my first example, I give you this Daily Finance article about how retailers are using Facebook to get inside your head. We all know that Facebook can be bad for productivity and possibly even our self images, but did you know that it’s also affording retailers the opportunity to trick us into brand loyalty? Me neither. Here are the two things Daily Finance says you should watch out for:
- “Liking” a company on Facebook. It may seem like an innocent gesture (or a way to nab a deal, which I do recommend), but according to Arizona State psychology professor Robert Cialdini, we have a “profound desire” to behave consistently after making a stand. And, believe it or not, liking a company on Facebook is a form of taking a stand. Researchers have found that becoming a company’s Facebook fan makes consumers 51% more likely to buy that brand. The lesson here: only “like” a company on Facebook if you actually like them.
- Bandwagon impulses. According to a study cited in the article, 46% of social media users report that their friends’ recommendations influence their purchasing decisions. Retailers know this, and they also know that advertising on Facebook is a way to get social media users to “follow the leader.” Imitation can be a form of flattery, but nothing is flattering about an unwise spending decision.
For more on how retailers are using Facebook to get inside our heads, check out the full Daily Finance article, linked above. And now, here are the other headlines for the week:
The Pricing Wars Get More Complicated
Several weeks ago, I wrote to you about personalized grocery store prices, and promised to keep you updated on these new, tech-driven pricing strategies. Already, I have an update for you. According to a new article in the Wall Street Journal, the internet pricing games that make our heads spin when it comes to buying airline tickets and hotel reservations are making their way to the more mundane itemsin our lives: microwave ovens. Bicycles. Even toilet paper.
“The most frequent price adjustments are occurring among web stores selling products on Amazon, which encourages ruthless competition between retailers vying for the top spot among search results,” the article says. “Sellers such as children’s clothing store Cookie’s use software to change prices every 15 minutes in order to stay on top of Amazon rankings.”
If you’re throwing up your hands in frustration, I don’t blame you. The internet was supposed to make shopping easier, and with information like this, people will be spending significantly more time researching products and then second-guessing whether they got it for the best price. My advice: ask yourself what you think you should pay for an item. Not what you think is the lowest possible price for an item, but what the item is worth. Then, when the real price approaches the price in your head, buy it. And then get off the computer.
Consumers Saying No To Invasive Apps
As I’m sure you know, there is no shortage of websites and apps in the market that aim to make our financial lives a little less complicated. However, some of them involve entering a good amount of personal information in order to work. The New York Times reports that consumers are increasingly saying “No!” to these very apps. A study by the Pew Research Center found that of adults who use apps on their smart phones, half decided not to install an app because it required too much personal information. What’s more, nearly one-third of users uninstalled an application after they realized it was requesting personal information they didn’t want to share. The Times says Pew’s findings suggest there’s a growing awareness about digital security and privacy; if this is indeed the case, I say bravo!
Oh I Shouldn’t Have…
Those of you who follow my Facebook or Twitter might recognize the above heading from posts I’ve done in the past. It’s also the name of a segment on my show, “Money Matters with Jean Chatzky” (formerly “Cash Call with Jean Chatzky”). You see, everyone makes a purchase every once in a while that has them saying, “Oh, I shouldn’t have,” myself included. This is a picture of a credenza I recently bought online. It’s lovely, but I ignored the “All sales are final!” warning at checkout. As luck would have it, the credenza didn’t fit my space the way I needed it to. I learned an important lesson: I shouldn’t have bought something this big from a website where all sales were final. That’s my “Oh I shouldn’t have” story; what’s yours? I’m looking to feature a few stories on my show, so if you don’t mind sharing your“Oh I shouldn’t have” experience, email me at jean@jeanchatzky.com. I’d love to hear from you!
Have a great week!
Jean
