Gerald Marzorati, the assistant managing editor for new media and strategic initiatives at the New York Times, said something out loud during a recent panel discussion that everyone knows, but no one really wants to admit: using a credit card separates you from how much you’re really spending, and subscribers seem blissfully unaware of subscription hikes. [More]
A new study says that 26% of US consumers “have no plans to return to their free-spending ways,” which probably doesn’t sound like good news to retailers. Even worse (for retailers), about a third say they’ve become less loyal.
Are America’s spending habits becoming more… gasp… sensible?? Time magazine has a list of things we’re spending our money on during this recession, and it might surprise you. We’re not buying tinned soup, we’re buying organic veggies! We’re finally getting that root canal we’ve been putting off! We’ve stopped boozing and whoring! And we’re learning to survive without painting our nails.
Geoffrey Miller, an evolutionary psychologist at the University of New Mexico, says marketers are trying too hard to find a working model of why people spend money the way they do. It really comes down to the human equivalent of “cost signaling” in the animal world—a sort of “peacock feather” display that’s supposed to tell peers and prospective mates how smart or sophisticated we are. The only problem is, other people never fall for it.
The FTC claims that CompuCredit didn’t properly disclose that it monitored spending and cut credit lines if consumers used their cards at certain places. Among them: tire and retreading shops, massage parlors, bars, billiard halls, and marriage counseling offices. “What they didn’t say was that you could be punished for specific kinds of purchases.”