In my previous two articles I examined the power of “free” – how it influences us into making irrational decisions and how marketers capitalize on this.
My first post illustrated how FreeCreditReport.com uses the offer of a “free” credit report to lure customers into signing up for a paid monthly subscription service.
My second post focused on the work of behavioral economist Dan Ariely as he demonstrated how we make truly poor choices when faced with “free” offers.
In this last post on the subject of “free”, I’d like to provide one more example of how we run across “free” offers that aren’t really free.
Recently I came across an advertisement for a magazine subscription. The offer emphasized 2 FREE Trial Issues.
Hey worth a try – I mean it is a free trial, right?
Well not quite. As with many of these “FREE” offers the devil is in the details.
You see the 2 FREE Trial issues are free only if you decide not to purchase the subscription.
Your reward for taking the trial and actually subscribing to the magazine – the trial issues are folded into the regular subscription!
Instead of getting 12 more issues, you receive only 10 more issues. This means you actually pay for the trial issues. So much for free.
Yet even worse, you’re required to provide your credit card information in order to receive your FREE trial issues. You must cancel the trial or you’re automatically charged for the subscription after the last “trial” issue arrives.
This “opt-out” scheme is a common marketing ploy. Most companies realize we live hectic lives. The last thing we’re going to remember is to cancel a magazine subscription before the trial period ends. Before you know it you’re subscribed to the magazine even if you decided you didn’t want to.
Yet it wasn’t just this particular magazine that was promoting FREE trial issues. Magazines from popular news magazines to lifestyle magazines all tout their not really free “free” trials.
More evidence of why its important to pay attention to the fine print of “free” offers.
Question: What are some of the “free” offer traps you’ve noticed or fallen victim to?
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Personal finance is about more than math. It's about behavior. Change your behavior and you change your financial situation.
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