Pricing Psychology Behind Discounts

  1. Anchoring Effect – Showing the original (higher) price first makes the discounted price feel like a bargain.
  2. Loss Aversion – Fear of missing out on a deal drives faster decisions.
  3. Urgency & Scarcity – “Limited-time offer” triggers a sense of now or never.
  4. Contrast Principle – The difference between old and new price feels bigger than it really is.
  5. Justification Effect – A discount gives emotional permission to spend without guilt.
  6. Round vs. Odd Pricing – Prices ending in .99 or .95 seem cheaper (e.g., $19.99 vs $20).
  7. Reference Pricing – People compare against what they think something “should” cost.
  8. Decoy Effect – Adding a higher-priced option makes the discounted one look smarter.
  9. Framing Effect – “Save $20” feels different than “10% off,” even if they’re the same.
  10. Goal Gradient Effect – Shoppers feel progress toward a reward (“only $10 more for free shipping”).

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