Why Everything Feels Like a Good Deal (And Why It Usually Isn't)

You found it. The perfect jacket. And it is sixty percent off.

Your brain does a quick calculation. Was $250, now $100. You are saving $150. That is basically free money. Not buying it would be losing $150. You would be an idiot not to buy this jacket.

So you buy it. You feel smart. You tell someone about the deal you got.

Three weeks later, it hangs in your closet with the tags still on. You realize you did not need a jacket. You spent $100. The $150 you saved does not exist anywhere. Not in your bank account, not in your life, not in reality. It was never real.

Welcome to the psychology of deals. Your brain is running on ancient software, and retailers have the source code.

The First Number Wins

Here is a question. If I showed you a coffee maker priced at $89, would you know if that is expensive or cheap?

Probably not. You do not walk around with the market price of coffee makers memorized. Neither does anyone else.

But what if I showed you the same coffee maker with a tag that read Was $179, now $89? Suddenly, you know it is cheap. You are getting a deal. Half off.

This is anchoring bias, and it runs almost everything you think you know about prices.

When your brain needs to evaluate an unfamiliar number, it looks for a reference point. The first number it sees becomes that reference. The anchor. Everything after that is evaluated relative to the anchor, not to any objective reality.

Researchers have demonstrated this with ridiculous scenarios. Ask people to write down the last two digits of their social security number, then bid on a bottle of wine. People with higher social security numbers consistently bid higher. The number was completely arbitrary, completely unrelated to wine, and it still anchored their perception of value.

Now imagine what happens when the anchor is not random. When it is specifically designed to make you feel like you are getting a deal.

The Original Price Is Fiction

Here is something most people do not realize. The original price on most products is a made-up number.

Not always. Not for everything. But far more often than you would guess.

There is a technical term for this. Manufacturers set something called an MSRP, or Manufacturer's Suggested Retail Price. The word suggested is doing a lot of work in that phrase. No one pays MSRP. It exists as an anchor, a number designed to make the actual selling price look like a bargain.

Then there is the compare at price. This is even more creative. Retailers show you what the item could cost at some hypothetical store, somewhere, maybe. The legal bar for this is shockingly low. If anyone, anywhere sold a similar item for that price at any point, the comparison can be justified.

The result is an economy where everything is perpetually on sale.

Walk into a furniture store. Everything is 40% off. Has been for months. Will be next month too. The regular price exists only on the tag, a number no one has ever paid, serving no purpose except to make the sale price feel like a win.

The same jacket at the same price feels cheap when paired with a high anchor and expensive when shown alone. Nothing about the jacket changed. Just the number next to it.

Your Brain Cannot Help It

The frustrating part is that knowing about anchoring does not make you immune to it.

Studies show that even when people are told the anchor is arbitrary, even when they are told to ignore it, it still affects their judgments. Experts are not immune. Experienced negotiators are not immune. People who literally study cognitive biases for a living are not immune.

The anchor infiltrates your thinking before you consciously process it. By the time you are evaluating the price, the damage is done. Your sense of what is reasonable has already been shaped.

This is why the Was $250, now $100 framing is so effective. You cannot un-see the $250. It becomes your reference point whether you want it to or not. The jacket becomes cheap in your mind, and that label sticks.

Retailers know this. They have known it for decades. Every crossed-out number, every percentage-off sticker, every inflated comparison price is designed to install an anchor in your brain before you have a chance to think critically.

The Percentage Trap

There is another trick happening, and it exploits a different quirk in how your brain processes value.

Quick. Which is a better deal: 50% off a $100 item, or 20% off a $300 item?

Most people instinctively feel like 50% off is better. Fifty percent is a bigger number than twenty percent. Half off sounds amazing. Twenty percent sounds fine, I guess.

But do the math. Fifty percent off $100 is $50 saved. Twenty percent off $300 is $60 saved. The worse deal actually saves you more money.

Your brain processes percentages and dollar amounts differently. Percentages feel proportional, important, significant. Seventy percent off triggers something primal. You are getting most of it for free. Meanwhile, $30 off feels flat, unremarkable, forgettable.

Retailers exploit this constantly. Small items get big percentages. Large items get modest-sounding dollar discounts. Both framings are calculated to make the deal feel better than it is.

The fix is almost annoyingly simple. Always convert to actual dollars. Ignore the percentage. Ask yourself how much money you would keep in your account if you did not buy this. That number is the only one that matters.

The Relativity Problem

Deals only exist in comparison. This seems obvious, but think about what it means.

Fifty dollars off does not mean anything in isolation. Fifty dollars off what? Compared to what? Fifty dollars off a $60 item is incredible. Fifty dollars off a $5,000 item is irrelevant.

Retailers control the comparison. They choose the anchor. They decide what normal looks like, and then they position their price as a deviation from that normal. You evaluate the deviation without questioning whether the normal was ever real.

This is why price tracking changes everything.

When you see the actual history of what a product sold for last month, last season, last year, you build a real anchor. Not the anchor the retailer wants you to have. A real one, based on actual data.

Suddenly, 60% off does not automatically feel like a deal. Because you can see that the item has never sold for the supposed original price. Or you can see that it was cheaper last month without any sale branding. Or you can see that this limited time offer has been running continuously for eight weeks.

The information breaks the spell.

When Deals Are Actually Real

Let me be clear. Not every deal is fake. Some discounts represent genuine value. The point is not paranoia. It is discernment.

Real deals tend to have explanations that make sense.

Seasonal clearance is real. Retailers have actual inventory costs. A winter coat in March takes up warehouse space. They will discount it to move it, and that discount is genuine because holding the item costs them money.

Open-box and returns are real. Someone opened it, maybe used it briefly, and sent it back. The item works fine but cannot be sold as new. The discount reflects that reality.

Competitive pricing is real. When multiple retailers sell the same item, they sometimes actually compete on price. This is different from manufactured urgency. It is the market functioning.

Loss leaders are real, but with a catch. A store might genuinely sell something below cost to get you in the door. The deal is real. But you are being funneled toward higher-margin purchases. Know what you came for.

The pattern to notice: real deals have a reason beyond generosity. There is a business logic. Fake deals only have the anchor.

A Better Framework

So what do you actually do with this information?

Here is a framework that has worked for me.

Would you pay this if there was no original price?

Remove the anchor mentally. If the jacket was just $100, no was $250 in sight, would you buy it? Would it feel like a reasonable price for what you are getting?

If no, the deal is not a deal. It is an anchor doing its job.

Research before you see the deal.

This is counterintuitive but powerful. If you know you want a new coffee maker, figure out what they typically cost before you start shopping. Read reviews, check multiple retailers, get a sense of the market.

Now when you see that Was $179, now $89 tag, you have your own anchor. Maybe $89 is genuinely good. Or maybe you already know that this model sells for $85-95 everywhere, and the $179 was fantasy.

Track prices over time.

This is where tools become genuinely useful. When you save an item and watch its price for a few weeks, you see reality. You see what the product actually sells for, not what the retailer wants you to think it sells for.

Price history is an antidote to anchoring. It builds a real reference point based on data, not suggestion.

Convert everything to dollars.

Ignore the percentage. Calculate the actual money. 30% off means nothing until you know the number it represents.

And then ask: is that amount of money significant to me? Sometimes $30 matters. Sometimes it does not. But you cannot answer that question until you convert the percentage to a real number.

The Uncomfortable Truth

There is a reason retailers invest billions of dollars in pricing psychology. It works.

You are not bad at evaluating deals because you are foolish. You are bad at evaluating deals because you are human, and humans did not evolve in an environment of dynamic pricing and artificial anchors. Your brain has excellent instincts for many things. Evaluating abstract numbers on screens is not one of them.

The retailers who figured this out are not evil masterminds. They are running experiments, collecting data, and optimizing for conversions. They found what works. They keep doing it.

You can be outraged about this, or you can adapt to it. Outrage is optional. Adaptation is useful.

What Actually Changes

The goal is not to become a paranoid bargain-hunter who interrogates every price tag. That sounds exhausting, and life is short.

The goal is a calibrated skepticism. A reflex that kicks in when you feel the deal euphoria, a voice that asks whether this is actually good or whether you are being anchored.

Most of the time, you will not do detailed research. You will make quick decisions based on imperfect information, like everyone does. That is fine.

But when the stakes are higher, when you are spending real money on something that matters, you now have tools. You know about anchoring. You know that the original price might be fiction. You know to convert percentages to dollars and to track prices over time.

You can see the trick.

And once you see it, it stops working quite as well. The jacket is still $100. The question becomes clearer: do you want a $100 jacket, or do you want the feeling of having gotten a deal?

Sometimes the answer is the jacket. Sometimes the answer is neither. At least now you are asking the right question.