Seen a sale? Think again: it's time to calculate how much we spent, not how much we saved

Sales have become an inseparable part of the Israeli shopping experience: the second for half price, 2 for 20, 8 for 30, special prices in apps, and discounts for club members.

But a red sign is not necessarily a cheap price. A simple check between chains shows that in many cases, the shelf price at a competitor is lower than the sale price they are trying to sell us. The UK is already examining stricter measures for dealing with misleading discounts, and perhaps it is time for us too to stop asking how many percentages we saved and start asking a much simpler question: how much did we actually pay?

We love sales. You don't need to be a consumer behavior researcher to see what happens to us in front of a red sign. We enter a store, see a crossed-out price and next to it a new one, and immediately feel that we have beaten the system.

But a sale and savings are not always the same thing. You can get the second product for half price and spend more money than you planned. You can buy eight units at a "special" price even though you came to buy two. And you can even buy a product on sale and pay more for it than the regular shelf price at a competing chain.

An economics lesson at the gas station

Let's take a familiar situation. You stopped at a Yellow branch. It's hot outside, you feel like a Magnum popsicle. The price per unit is 16.90 NIS. Not cheap. But immediately a sale appears: two units for 26 NIS. If you have the chain's app, the price drops to 24 NIS for two units (12 NIS per unit). Your head starts calculating the savings.

Now let's replace the point of comparison. At Rami Levy, without a sale, the same product is sold for 10.90 NIS per unit. As part of a sale of two units for 18 NIS, the weighted price drops to 9 NIS per unit.

Go back to the Yellow sale. Two units for 24 NIS using the app still sound like a bargain? No. The price per unit is about 33% higher than the sale price at Rami Levy.

It is easy to say that the comparison is unfair, as Yellow is a convenience store and Rami Levy is a discount chain. But these boundaries are blurring. Convenience chains are increasing their variety and trying to get a larger part of our shopping basket. But at the end of the month, the bank does not separate expenses: the bill arrives on the same card. From the household's perspective, it's all the same money.

Nine Bamba or eight?

This example is prominent in the salty snacks category. Sometimes the unit price on the shelf is high, but opposite it is placed a big sale that calls us to take a lot. At Rami Levy, you can find a sale of 9 units for 30 NIS, and at Victory, a sale of 8 units for 30 NIS. The amount is the same, the feeling of a "sale" is the same, but there is less product.

At Rami Levy, the weighted price is about 3.33 NIS per unit; at Victory, it is 3.75 NIS. The gap is not dramatic, but it illustrates perfectly how we read sales. Many consumers see "30 NIS" and don't stop to check if they are getting eight units or nine. You might have only come in for two bags. The sale changes your behavior, making you buy more than you planned.

When the regular price is cheaper than the competitor's sale

Sometimes the sale price in one chain is higher than the regular shelf price in another. For example, at Victory, the sale price of Osem pasta is 5.63 NIS. Compared to the regular price of 6.90 NIS, this is indeed a discount. But at Rami Levy, the regular price is 4.90 NIS.

So is 5.63 a sale price? Yes. Is it the most profitable price for the consumer? No. Both answers can be true at the same time.

The problem is that we tend to complete the part we weren't told by ourselves. We see "sale" and translate it to "cheap". But these words are not identical. A sale means the price has dropped relative to a certain reference point. "Cheap" requires a comparison to the market.

Time to change the mindset

In the Israeli market, a complex pricing structure has been created: regular price, club price, app price, personal coupon, quantity sale. It is very difficult for the consumer to know the real price of a product. Price comparison tools are important not because they deny the existence of sales, but because they provide context.

A family in Israel does not pay the credit bill in discount percentages, but in NIS. If we left the supermarket with a cart of 900 NIS instead of 750, the fact that 25 products were on sale is not necessarily a consumer success.

Next time you stand in front of a big red sign, before you reach for the shelf, ask three simple questions:

1. Do I really need this quantity?

2. How much does one unit cost?

3. How much does the same product cost elsewhere?

Because sometimes a sale really saves us money. And sometimes it just makes us feel that we saved. And that is not the same thing.