With the rising cost of living across the UK, research reveals 70% of shoppers surveyed are more frustrated than ever with teaser pricing – a tactic used by many brands to hook consumers into spending more – with 93% saying they are more likely to avoid buying goods and services from those brands in the future.
A study commissioned by Shawbrook of 2,000 consumers who have bought goods and services online, has delved into consumer frustrations with teaser pricing and lack of transparency provided when brands use this pricing practice in advertising. Leading psychologist Dr Cathrine Jansson-Boyd, consumer psychologist at Anglia Ruskin University, who also worked on the study highlights the negative psychological impact teaser pricing can have on consumers.
According to the research, more than half (52%) of shoppers surveyed admitted to feeling frustrated when they are unable to buy something at the originally advertised ‘teaser’ price. In fact, over 60% said they have ended up paying more than the advertised price for goods and services ranging from package holidays and flights to car hire and gig tickets.
Dr Jansson-Boyd suggests the rising cost of living and increasing inflation rates are front of mind for many shoppers, and brands using teaser pricing is leading to a less transparent shopping experience: “Researchers suggest that we have seen higher levels of anxiety in the population than ever before during the last two years, which started with COVID and has increased or been maintained due to other factors such as current economic conditions and global instability. Consumers are more cautious and wary of brands that use teaser pricing, seeing beyond the smoke and mirrors to question their transparency.”
Teaser pricing is eroding trust
Unsurprisingly, more than three quarters (77%) of respondents categorically say they “like brands less” if they advertise using teaser prices, while 93% say that when they experience teaser advertising it makes them “more likely to avoid buying goods and services from those brands in the future”. A further three quarters of consumers say they are very unlikely to recommend a brand that uses teaser advertising to a friend as a result.
Dr Jansson-Boyd continues: “Brand integrity has become a key aspect that consumers focus on. Consumers want the brands they commit to, to show that they are not only honest but also that they are engaged in issues that are important. However a brand that is using teaser prices that consumers are uncomfortable with, will soon be perceived to lack brand integrity, even if they support social justice or alike.”
The vast majority (87%) of UK consumers agree that it is misleading to advertise a teaser price for goods and services at the start of the process only for it to change by the end, with four in five suggesting there should be more governance around the use of teaser pricing and encourage more transparent pricing standards. Mystery shopping research has revealed that consumers could end up paying a huge 354% more than initially advertised for flights and 196% more for package holidays when additional add-ons or surcharges like delivery of tickets, seat reservations, luggage or booking fees are taken into account.
One such example of this by a well-known budget airline saw “flights to Malaga” advertised at £52 each way, only for the final price to be a whopping 282% higher at £199 for a one way flight with no luggage, or £236 with 22kg of luggage. For return flights, this increased by an astonishing 727% to £430 per person.
Sally Conway, Head of Consumer Communications at Shawbrook adds: “Our latest research shows that FrOMO has become a common experience for UK shoppers. There is no doubt that consumers feel misled and frustrated by teaser pricing, particularly in the current economic climate. The continued rise of online shopping and an increasingly competitive marketplace has fuelled this, with more ways of targeting customers with a so-called ‘good deal’.
“We encourage shoppers to thoroughly research goods and services across a multitude of brands to ensure they’re getting the best deal for them, while being mindful that what they see may not be what they’ll end up getting.”