Why ‘Buy One, Get One Free’ Deals Aren’t Always as Good as They … – The Motley Fool

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Don’t be lured by those promotions.

Key points

  • Consumers tend to love the idea of getting things for free.
  • In some cases, BOGO offers aren’t as good as they sound.
  • Items eligible for BOGO offers might be marked up to make up the difference when an item is “free.”

In the world of marketing, there’s perhaps no more effective a phrase than the word “free.” Whether it’s free shipping, free returns, or free stuff, consumers tend to love the idea of getting something for nothing.

As such, you’ll often find retailers advertising “buy one, get one free” deals, or BOGO deals. And you may be tempted to whip out your credit card the next time you see one flashing before your eyes.

But falling into the BOGO trap could cost you money in different ways. And that’s something you ought to be aware of.

When ‘free’ isn’t really free

The idea of the BOGO deal is simple: Buy an item and get an item of equal or lesser value at no cost. If you’re out shopping for books and come across two novels you’d love to take home for $9.99, a BOGO deal will mean spending $9.99 for both instead of $19.98. There’s a lot of savings in that, right?

Well, not necessarily. Often, what retailers will do in the course of BOGO deals is mark up the prices of the items they’re selling. That $9.99 book you’re getting for free? It might normally retail for $4.99. And in that case, the cost of two full-priced books actually comes to $9.98, which means you’re actually spending a penny more on the BOGO deal.

Of course, this is just one example. The point, however, is that much of the time, when you’re offered something for free at a retail store or site, you’re paying for it in a less obvious way.

The same can be said for free shipping. Let’s say a given retailer offers free shipping on purchases of $49 or more, and voila — you find a sweater you love with a $49 price tag. In that scenario, you might think you’re coming out a winner. You’re getting the exact item you want, and you won’t see a separate charge for shipping on your credit card.

But chances are, the cost of that sweater was marked up by $10 to $15 to cover the cost of shipping it to your home. So in that case, did you get free shipping? Yes. But did you save money? No.

The same can be said for BOGO offers. You might pay the equivalent of two items’ worth without even realizing it (such as shelling out $9.99 for a book whose normal price tag might be $4.99). And also, seeing the word “free” might push you to spend money you weren’t initially planning to part with. And so in that case, you’re not saving money either.

Be careful with BOGO deals

One final thing to keep in mind when seeking out and acting on BOGO deals is that even if you’re getting a decent price on the one item you’re paying for, if you don’t actually want a second item, you’re not getting much of a bargain. Let’s say you see a BOGO shoe deal at a local shop and you find a pair of $25 sandals you want to purchase. That may render you eligible for another $25 pair of shoes at no cost. But if you can’t find one that fits well or suits your taste, then what are you really getting?

All told, retailers are in the business of making money. And they’re very good at doing so. So when you see BOGO offers, don’t assume that retailers are throwing you a bone. If anything, they’re just employing an age-old tactic that gets you to part with your hard-earned cash.

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