I am privileged to serve on the Board of the Mississippi Council on Economic Education. This important organization is doing some great work to help not only train our school-aged kids to become better consumers and more economically-literate, but also to provide economics training for educators through a program called Master Teacher of Economics. This is one area in which Mississippi is leading the nation, as our Council has been recognized as one of the most effective in the country.

One problem we have, though, is that most people still aren’t really equipped to do battle in the retail marketplace. When you enter a store, you are entering a realm that is a highly-engineered space designed to do one thing: to make you spend more money. (Not that there’s anything wrong with that; it’s free enterprise at work!)

Many consumers don’t realize that the odds are stacked against them as they stroll the aisles of any retail establishment. Psychologists, behaviorists, economists and other really smart people have helped retailers use their sites to maximum advantage. Everything from the parking lot design, to the pathway into the store, to the temperature and color of the lights are purposefully chosen. Sights, smells and sounds are all designed to get you to spend more. It’s a battle, and if you aren’t prepared, you’ll lose.

Discounting is one battlefield which many consumers enter woefully unprepared. For example, studies have shown that, if given a choice between two identical items, one which included “50 percent more” and another “1/3 off”, they would nearly always choose the item which was 1/3 off, when the two offers actually produce identical results. In the experiment, conducted by researchers at the University of Minnesota, consumers bought 73% more hand lotion when it was offered in a “bonus pack”, as opposed to offering an equivalent discount. The research suggests that people actually view getting more product as being the better value, when it actually isn’t.

Here’s another trick: “Double discounting”. A retailer offers an item for sale at a price of 20 percent off the original price, plus an additional 25 percent of the already-reduced sale price. Most consumers would think that would amount to a total of 45 percent discount, when it actually means a 40 percent discount. In this case, let’s say the item was originally $100.00. The first discount takes the price to $80.00. Then, the 25 percent discount kicks in, but is based on the reduced price, meaning the item now costs $60.00.

You may be outgunned, but it is possible to prepare. Here are some tools to help you win the battle of pricing psychology:

1. Prepare your list, and stick to it. This is time-tested basic shopping strategy.
2. Shop when you have a lot of time. We’re more likely to make better decisions when we’re not rushed.
3. Take a calculator with you to the store, and figure up the actual price.
4. Comparison shop on items you frequently use. This takes a lot of time and effort, but is worth it.
5. Take advantage of “unit pricing”. More stores are providing the actual price per unit on the shelf tags, allowing you to compare whether a discounted price is really a good deal. In some cases, buying a package containing several units can save you money over buying those individually, even at the sale price.
6. Use coupons, but wisely. Coupons are designed to increase demand for products, but if you’re not careful, they can make you buy things you wouldn’t normally buy.

For more help on being a prepared shopper, visit http://www.consumer.ftc.gov/.