Three Reasons You Get Suck(er)ed Into Black Friday and Cyber Monday Sales

We just hate to miss out

Published: Tuesday, November 22, 2022 - 13:03

Imagine you put on an old coat you haven’t worn in a while, and to your surprise you find a crumpled $20 bill in your pocket. How good does it feel? Do you go up half of a notch on a 1–10 mood scale—or maybe a full notch?

Let’s imagine a different scenario. Your grandmother calls to say she hopes you can use the $20 she sent with your birthday card, which you have since thrown away, along with the $20 that you somehow missed. What does that do to your mood on the 1–10 scale?

If you’re like most people, you feel a greater shift in mood losing $20 than gaining it. That tendency is called loss aversion, one of many cognitive biases. This is where the saying “fear of missing out” or FOMO, has its origins. Loss aversion is one of the most fundamental insights of a field of behavioral science called “prospect theory.”

Loss aversion is one of the three key reasons why our minds get sucked—and suckered—into Black Friday and Cyber Monday sales. Retailers know that our intuitive reaction is to avoid losses, with research showing this drive might be up to twice as powerful as the desire to make gains. By offering short-term sales, available only on Black Friday or Cyber Monday, they tap into our deep intuition to protect ourselves from the loss of the opportunity represented by the sale.

Similarly, loss aversion helps explain why so many marketing techniques involve trial periods and free returns. Retailers know that, once you've already bought something, you’ll be averse to losing it.

In a classic research study illustrating this tendency, participants were divided into two groups: one was given a chocolate bar, and the other a mug. Then, they were offered the chance to trade what they had for the other object. Of the students given the mug first, only 11 percent chose to trade it for the chocolate bar; only 10 percent of the students who got the chocolate first exchanged it for the mug.

We want whatever we have and are reluctant to lose it—such as an opportunity to buy something at a lower price during a short time period during Black Friday or Cyber Monday sales. In fact, behavioral scientists have a special term for people putting excessive value on whatever they have, even to the point of being reluctant to give it up: the endowment effect, a specific form of loss aversion.

Now, let’s imagine yet another scenario. It’s Cyber Monday, and you decided to check out the deals on an e-commerce website. You go there, feeling confident you’ll only get one or two of the best deals.

But once you visit the website, you’re hooked. All those deals look great, with the prices so much lower than usual. You can’t pass them up! So you end up taking advantage of a bunch of deals, and purchase much more than you intended to in the first place.

Why did that happen? Why couldn’t you control yourself? It’s due to another cognitive bias called the restraint bias.

We substantially overestimate the extent to which we can restrain our impulses. In other words, we have less self-control and weaker willpower than we like to think we do.

That’s why so many people overeat at buffet restaurants. If we had good self-control, buffet restaurants would be great: We could get whatever we want at a cheaper price than ordinary restaurants. Yet the problem is that we overestimate our ability to control our impulsive desire to take more food, and loss aversion causes us to try to avoid losing the opportunity to take the wide variety of food available at buffets.

Black Friday and Cyber Monday are the shopping equivalent of buffet restaurants. So many tempting deals linger around, with loss aversion driving us to not want to miss out, all resulting in shopping much more than we wanted.

The final key psychological reason for why you get sucked into Black Friday and Cyber Monday sales is because you’re reading this article. Here’s the thing: The abundance of news stories, advertisements, and social media posts about Black Friday and Cyber Monday makes it seem like everyone is thinking about sales on those days and looking for good deals.

As a consequence, our minds drive us to participate in Black Friday and Cyber Monday sales, a tendency that scientists call the bandwagon effect. When we perceive other people aligning around something, we’re predisposed to join them. After all, they wouldn’t be doing it if it wasn’t a good idea, right?

Loss aversion, restraint bias, and the bandwagon effect are mental blind spots that affect decision making in all life areas, ranging from the future of work to mental fitness. Fortunately, recent research has shown effective and pragmatic strategies to defeat these dangerous judgment errors, such as by using decision aids to constrain our shopping choices.

A useful strategy for Black Friday and Cyber Monday involves deciding in advance about the purchases you’d like to make if they are on sale and buying them online instead of in the store. For example, you might decide to buy a certain laptop if it’s more than 20 percent off, or a specific big-screen TV if it’s 30 percent off. Save the website pages of the laptop or TV that you want to buy, and then visit them on Black Friday and Cyber Monday to see if they’re on sale. If they’re not, be disciplined and don’t buy something else, because you’re likely to get stuck buying much more than you wanted, and some deals are actually too good to be true. Instead, wait for the Christmas sale.

If you’re a leader who sells products, consider whether you can take advantage of loss aversion, restraint bias, and bandwagon effect among your customers, whether on Black Friday and Cyber Monday or throughout the year. Alternatively, consider sharing this article with your employees to help them make smart decisions this holiday shopping season.

About The Author

Gleb Tsipursky

Dr. Gleb Tsipursky helps quality professionals make the wisest decisions on the future of work as the CEO of the boutique future-of-work consultancy Disaster Avoidance Experts. A proud Ukrainian American, he is the best-selling author of seven books, including Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters and Leading Hybrid and Remote Teams: A Manual on Benchmarking to Best Practices for Competitive Advantage. His cutting-edge thought leadership has been featured in more than 650 articles in prominent publications such as Harvard Business Review, Fortune, and USA Today. His expertise comes from more than 20 years of consulting for Fortune 500 companies from Aflac to Xerox and more than 15 years in academia as a cognitive scientist at the University of North Carolina-Chapel Hill and Ohio State. Contact him at Gleb[at]DisasterAvoidanceExperts[dot]com, Twitter@gleb_tsipursky, Instagram@dr_gleb_tsipursky, LinkedIn, and register for his Wise Decision Maker Course.