Persuasive communication

A Variety of Scams and Ploys Designed to Separate You from Your Money

Someone is plotting–right now–to take your money

One of the joys of studying persuasion is seeing the infinite ingenuity that humans can deploy to figure out ways to separate people from their money, ranging from subtle (and legal) to downright criminal.

The June 30 issue of The Economist contained three articles along these lines.

Even Nigerian scammers qualify their leads

We laugh at the obvious scams that pop up all the time in our email, especially the ones from Nigeria that offer us an opportunity to earn easy millions by giving our bank account details. They are written in such poor English that you wonder how anyone could ever fall for them. One would think that, over time, these scammers would get better and make their attempts less transparent. According to a Microsoft research paper summarized in the magazine, however, the scammers deliberately make their scams obvious.

There is a method to their madness which would make sense to anyone who tries to find ways to improve their sales process. Turns out that the most time intensive and costly phase of the scammer sales cycle is after the “prospect” has taken the first step. So the key qualification is extreme gullibility, and the best way to disqualify all but the most gullible is to make the ploy so transparent that only a real idiot would fall for it. Apparently there is a limitless supply of these, as the scams continue.

Mac users pay more for travel

This one is much less obvious. It’s probably not illegal, and may even be fair, but stills smells a little funny. In retail stores, experienced sales staff know how to quickly size up potential buyers by the clothes they wear or what they look at while browsing, and steer them to more or less expensive options.

Now there is software to help online retailers do the same thing. Many are using it to qualify shoppers through cookies on their web browsers that enable them to change their offers—and their pricing—based on certain criteria. For example Orbitz has learned that Mac users tend to stay in pricier hotels, so those are what they recommend. Orbitz says it does not price differently, but other online firms appear to be doing that.

For example, if you click quickly from the first time on the site to the payment page, they know you are a very likely buyer, so they may not offer you a discount to clinch the sale. Also, sometimes they can discern your physical address; if they know you live in a pricier neighborhood you may receive different pricing options.

As these practices become more widely known, smart shoppers will modify their own online behavior, such as taking their time deciding inn order to get discount offers. The battle of wits will continue.

What’s better, a discount or a bonus?

Would you rather have a 33% discount on the price, or get 33% more for the same price? Most people view these as equivalent, but they are definitely not. When you get the bonus, you’re effectively getting a 25% discount on the per-unit price.

That’s important because a study done at the University of Minnesota found that shoppers prefer to get a bonus than a discount. Smart retailers are taking advantage of the fact that most people don’t understand percentages well enough to reliably compare offers. That’s why the researchers were able to sell 73% more hand lotion when it was sold as a bonus than as an equivalent discount.

Another way that shoppers get confused is to offer successive discounts. If an item is discounted 20%, then a further 20%, it sounds like a 40% discount, but it’s really only 36%. (If this math is confusing you, then you are just the type of shopper they are looking for.)

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