What you see may not always be as it is. This is especially true in advertising and other venues, and can lead customers astray to the benefit of the sellers. I have seen this trap, especially, with gas prices. Consider the next two photos:
Both of them advertise low prices on the regular gas compared to nearby gas stations, but of course there is a catch!
The Kenosha gas station had regular for $2.04/gallon, but only if you pay cash. The credit price jumps up by 15 cents per gallon!
The Wadsworth gas station had regular for $2.14/gallon, but only if you also buy a car wash! Otherwise, you’d pay $2.34/gallon.
I think that the lower cash price is fair, but that the lower price-with-car-wash is a sleazy bait-and-switch for customers who aren’t reading the gas station’s sign carefully. Granted, demand for gasoline is inelastic, but I still find it to be an unnecessary ploy.
But, it’s not as bad as what happened in western Nebraska in 2007: some gas stations off Interstate ramps would advertise prices significantly lower than other areas… but offer the price at one pump only! The other pumps would have a major (30-cent or more) price differential! I think that motorists complained about this practice and the Nebraska legislature stepped in to prevent that practice.
Nevertheless, you have to be a savvy shopper when gas stations play these games with their prices.
Interestingly, I found that it is illegal in some states to frame a lower cash price as a “credit card surcharge…” you must instead call the lower cash price a “cash discount” when advertising the credit card price. There’s a psychology study about this technique that I read in my Cognitive Psychology class, ten (!!) years ago.
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