1. You'd Better Shop Around
The image of an angel and a devil sitting on a person's shoulders is not a bad metaphor for shopping. Using brain scans, researchers have shown that the nucleus accumbens, an area associated with pleasure and reward, lights up as people consider a purchase, while the insula, a structure that plays an important role in pain, is activated when they think about the cost. The two brain areas compete with each other to determine whether you will buy something. Your typical tightwad, says Loewenstein (who conducted the brain research with Brian Knutson, PhD, of Stanford), feels the pain of paying for things more acutely. Spendthrifts may not register it enough.
Buying a lot in one store can decrease your sensitivity to the pain of cost, says Loewenstein. "You hit the what-the-heck effect: You've spent $200; what's another $20 for a T-shirt?" He recommends going to various stores for different purchases.
2. Don't Buy Into Bargains
Another factor that can tip the brain's pleasure-pain dynamic is a bargain. Knutson and Loewenstein have shown not only how the brain weighs making a purchase but also how it reacts to price. The researchers gave subjects $20 to spend on a series of products they saw on a computer screen. When the shoppers considered the prices excessive, the insula became activated; when they saw discounts, their accumbens lit up like a Broadway marquee. The prefrontal cortex, associated with weighing gains and losses, also became active along with the accumbens—and this pattern predicted a shopper's decision to buy.
Sales, markdowns, two-for-ones, and outlet stores are all designed to hit our bargain-loving Achilles' heel. So are retail tactics we should be wise to, like buying an item for $29.99 because we tend to discount it to $20 instead of $30, says Ellen Ruppel Shell, author of the new book Cheap: The High Cost of Discount Culture. "Even psychologists confess that they've been seduced." The anticipation of getting a good deal, says Shell, is what drives us toward the cash register, not the object itself—and as a result, we end up with stuff we don't particularly want.