Have you ever felt unhappy about a purchase you made despite spending hours reading product descriptions and reviews, comparing dozens of options, and finally choosing what you perceived to be the best deal? I faced the same problem many years ago, when I still lacked the knowledge of effective shopping techniques around buying choices.
We make shopping mistakes because of how our brain is wired and because retailers use human psychology to their advantage by manipulating the shopping process, particularly in digital contexts. Amazon and other retailers want us to spend as much time as possible on their websites to tempt us with a variety of add-ons and options and to cause us FOMO (fear of missing out) on the best possible deal. This drains our time and wallets – and even our happiness. It’s a good thing you can learn more about the psychological dangers of shopping through cutting-edge research in behavioral economics and cognitive neuroscience.
Choose + Buy = Happiness?
Tom’s wife usually does the grocery shopping in the family, but she had the flu so Tom went instead. Selecting the fruits and veggies went fine, but he hit a wall when he got to the bread section. There were over 60 varieties to choose from. Tom examined the ingredients and made comparisons; he wanted to get it right, after all. After 10 minutes of deliberation, he picked one that seemed like the perfect choice.
However, he had to repeat the process for the rest of the packaged goods. Different brands offered a host of choices, and his wife’s usual shopping list that said “bread” or “cheese” didn’t help. By the time he was finished shopping and paid for everything, he was tired and miserable.
Why did Tom have this kind of experience? Shouldn’t he be happy that there were many choices in the supermarket? After all, mass media presents the narrative that abundance of choice equates with happiness.
According to neuroscience and behavioral economics research, the real story is more complicated than that. While having some options make us feel good, once we get beyond that small number, we feel less and less happy the more choices we get.
For example, in one study, shoppers at a food market saw a display table with free samples of 24 different types of gourmet jam. On another day in the same market, the display table had 6 different types of jam. The larger display attracted more interest, but people who saw the smaller selection were 10 times more likely to purchase the jam, and they felt better doing so compared with those who had to select among the larger display.
This phenomenon was later named “choice paralysis”, referring to the fact that after a certain minimal number of choices, additional options cause us to feel worse about making a decision and also makes us unlikely to decide in the first place. This applies to both major and minor decisions in life, such as when choosing a retirement plan or something as simple as ice cream flavors.
Loss Aversion & Post-Purchase Rationalization of Buying Choices
Why do more choices cause unhappiness? Well, one typical judgment error we make because of the wiring in our brains is called loss aversion. Our gut reactions prefer avoiding losses to making gains. This is probably because of our evolutionary background; our minds evolved for the savanna environment, not for our modern shopping context. Due to this, when we have lots of options, we feel anxious about making the wrong choice and losing out on the best one.
Even having the opportunity to change your mind can be problematic. As it turns out, the benefit of having the option to exchange a product or get a refund is a myth. Another counterintuitive behavioral economics finding shows that people prefer to have the option to refund their purchases but feel more satisfied if the shopping decision is irreversible.
This is due to a phenomenon called post-purchase rationalization, which is also called choice-supportive bias. Research finds that after making a final decision, we try to justify it. We focus on the positives and brush off the negative aspects. After all, if you’re a smart person, you would not make a bad purchase, right? However, if the choice can be reversed, this post-purchase rationalization doesn’t turn on, and we’ll keep thinking about whether it was the right choice.
In-Person vs. Online Shopping in Buying Choices
Online shopping in many ways facilitates a more unhappy shopping experience. Let’s start with choices. According to research, most consumers have the same process of online decision making. The shopping process divides into two stages: first, lightly screen a large set of products to come up with a smaller subset of potential options; second, perform an in-depth screening of the items in this subset.
The much wider selection of products online, compared to a brick-and-mortar store, gives online shoppers the opportunity to examine a greater number of potential options. We know we tend to like more options, believing (wrongly) that the more options we examine, the happier we will feel about our final choice. As a result, we make ourselves less happy by examining even more products online, without even seeing the damage we’re doing to our happiness.
Another counterintuitive problem: it’s easier to return items you purchased online than in a store. For a store, you have to drive back there, wait in line and explain what had gone wrong, and then head back home. By contrast, most large online retailers will ask you to print a return label from their website and then ship the item back to them. Oftentimes, they would also pay for the shipping fee. This process is easier and takes much less time, thus many shoppers tend to see their online shopping decisions as tentative, therefore making themselves unhappy.
Another challenging aspect of online shopping concerns data privacy and security. Shoppers feel unhappy about the extensive tracking of their data online. Smart consumers know about and feel concerned about the risks involved in online shopping because of how online retailers store and sell their information.
How Can Your Buying Choices Promote Happiness?
Digging into research on factors that made my shopping a more unhappy experience years ago helped me improve my buying decisions. When choosing what to buy, the number one technique involves satisficing as opposed to maximizing. This is backed up by extensive research, both involving in-person and online shopping.
Maximizing behavior refers to finding the perfect option when shopping. Maximizers exhaust all available options to make sure that they get the best deal in terms of performance, price, and so on. They have high expectations, and they anticipate that the product will fulfill this promise.
It’s the opposite for satisficers. They set certain minimal criteria that need to be met, then search for the first available product that meets this criteria. They look for products that are “good enough” and those that can get the job done, even without the bells and whistles or savings which they might have found in an extended search.
Research shows that maximizing behavior results in less happiness, less satisfaction, and more regret than satisficing. This finding applies especially in societies that value individual choice highly, such Western Europe and the United States. In societies that place less of a focus on individual choice such as China, maximizing has only a slight correlation with unhappiness, yet still contributes to it.
To be happier, satisfice and limit your choices! Make a shortlist that compares a reasonable number of options and doesn’t include every product available. There’s no such thing as the perfect deal. Buying something that gets the job done, without excessive searching, is going to make you happier in the long run.
When you’re shopping in person, avoid Tom’s problems by skipping big supermarkets with a gazillion options of every product. Instead, go to grocery stores with a small selection of acceptable products, whether Aldi for cheaper price or Trader Joe’s for higher quality. You don’t need 40 types of butter, do you? Just 4 will do. If you really need to go to the supermarket, save yourself from the hassle of choosing from so many varieties by going for the store brand every time.
When shopping in-person and especially online, it helps to get objective information in advance to limit your options. Make sure to use credible product reviews and media sources for these.
You will also probably feel happier about a purchase by ignoring free return or refund offers, unless the product is defective. Treat each shopping decision as final and irreversible, and get post-purchase rationalization working for you. Combine this with satisficing to get great results, because when you focus on “good enough”, your brain automatically highlights the positives, downplays the negatives, and lowers your expectations.