Most of us are familiar with ‘Retail Therapy’, which is shopping with the primary purpose of improving the Buyer’s mood or disposition. However, spending your money on comfort buys could also end up being a downer. Buyer’s remorse is the sense of regret after having made a purchase. It’s a backward-looking emotion that we experience when realizing or imagining that our current situation would have been better if we had decided differently. It signals an unfavorable evaluation of a decision coupled with self-blame and strong wish to undo the current situation.
“…once we make a decision, the ‘grass is greener’ effect kicks in, and we question our choice.”– John Carvalho
Buyer’s remorse is often associated but not limited to the purchase of an expensive item such as a vehicle or real estate and is preceded with positive emotions before a purchase is made (desire, a sense of heightened possibilities, and an anticipation of the enjoyment that will accompany using the product) and in some cases with anxiety like FOMO (Fear of Missing Out). Later, the buyer experiences negative feelings related to all the opportunity costs or alternatives of the purchase, reduction in purchasing power, not having their expectations met, or ending up not using the purchase. The regret could be both for material or experiential purchases.
Research has established that experiential purchases yield greater enduring satisfaction than material purchases. A study by Emily Rosenzweig and Thomas Gilovich of Cornell University, concluded,
“The difference in satisfaction is paralleled by a tendency for material and experiential purchases to differ in the types of regrets they elicit. People’s material purchase decisions are more likely to generate regrets of action (Buyer’s remorse), and their experiential purchase decisions are more likely to lead to regrets of inaction (missed opportunities). These results were not attributable to differences in the two purchase types’ desirability or satisfaction.”
What the numbers say
According to Black Friday Shopping Report by Finder.com, 64 % of Americans spent a combined total of $74 billion in 2021 purchasing items on sale that they later regretted.
The most commonly regretted shopping decisions don’t revolve around big-ticket items. 77.27% of these dissatisfied Americans bought shoes and clothing with an average spend of $72.02, followed by gadgets and electronics, with 51.43% making regrettable purchases at an average of $175.85. Rounding out the top three were food and alcohol purchases at 44.25% and an average spend of $67.70. Only 23.77% of shoppers in survey said they regretted buying big-ticket items like a major appliance at an average spend of $255.11.
The above study demonstrated gender equality in Buyer’s remorse, with 64.5% of women regretting purchases they’d made, versus 64.1% of men. However, younger people have more Buyer’s remorse, with Gen Z ( born 1997-2002) having the highest share of remorse at 70.8%, followed by Millennials (1981-1996) at 70.1%, Gen X (1965-1980) at 68.5%, Baby Boomers (1946-1964) at 58.6%, and The Silent Generation (1928-1945) at 49.7%.
In another 2016 study by Alexandra C.H. Skelton and Julian M. Allwood of the University of Cambridge in the United Kingdom, 82 percent of people reported feeling Buyer’s remorse across 20 product categories. The most prevalent regrettable purchases were clothing, shoes, and take-away food. According to this study, the tendency to regret purchases appeared to reduce with age and is more common amongst white-collar workers than blue-collar workers. Combining survey results with average price estimates gave an estimated aggregate annual expenditure on regretted purchases of £5–25bn, equivalent to 2–10% of annual consumer spending on goods in Great Britain.
What causes Buyer’s Remorse
Buyer’s remorse is believed to stem from cognitive dissonance, the feeling of psychological unease that happens when you’re at odds with your own thoughts, actions, or beliefs.
Usually, three main factors affect how deep your regrets run:
- Effort: How many resources — like time and money — you invested into making your purchasing decision.
- Responsibility: Having no one else to blame for those wayward buys (except maybe some marketers who hooked you in).
- Commitment: The fact that you’re going to have to live with this new-found, possibly not-as-cool-as-you-thought item, for a long time.
Another factor that influences your remorse is ‘choice stress.‘ In his 2004 book, The Paradox of Choice, Psychologist Barry Schwartz explained that while “autonomy and freedom of choice are critical to our well-being”, having more choices makes it harder to know which one is best.
In the book, Molecule of More, Daniel Z. Lieberman and Michael E. Long informs us how the transition from excitement of pre-purchase to post-purchase enjoyment can be challenging in our brain.
“It’s an instance of the dopamine-induced desire circuit breaking its promise. It told you that if you bought that expensive car, you’d be overcome with joy, and your life would never be the same. Except, once you became its owner, those feelings were neither as intense nor as long-lasting as you had hoped. The desire circuit often breaks its promises—which is bound to happen because it plays no role in generating feelings of satisfaction. It is in no position to make dreams come true. The desire circuit is, so to speak, just a salesman.”– Molecule of More, Daniel Z. Lieberman and Michael E. Long
As we anticipate the desired purchase, our future-oriented dopamine system is activated and creates excitement. Once possession is achieved, the desired object moves from the future, distant realm of dopamine, and into the consummatory, near-body realm of Here & Now molecules (serotonin, oxytocin, endorphins, and endocannabinoids). Buyer’s remorse is the failure of the peri personal, ‘Here & Now’ experience to compensate for the loss of dopaminergic arousal. If we made a wise purchase, it’s possible that strong ‘Here & Now’ gratification will make up for the loss of the dopamine thrill.
In contrast to the Buyer’s remorse, we humans are also affected by ‘Post purchase rationalization’ a cognitive bias whereby someone who has purchased an expensive product or service overlooks any faults or defects in order to justify their purchase.
Post-purchase rationalization is often called “Buyer’s Stockholm Syndrome”. Once they’ve made the purchase decision, customers are “held captive” by it, even if they don’t like the product after they start using it. Eventually, they convince themselves that they like whatever it is they purchased (i.e. their captor).
Post-purchase rationalization occur for several reasons:
- We don’t like to acknowledge we often make emotional decisions, so we rationalize them later.
- We also don’t like to admit that we’re wrong and made an irrational decision with our purchase, so offer justification for the purchase.
- We put a higher value on things we already possess.
- As we age, we are more susceptible to Post-purchase rationalization. That may explain why older people suffer less from Buyer’s remorse.
- Our brain misattributes, distorts facts, forgets selectively and creates false stores memories in a choice-supportive way to rationalize our purchases.
Consumers frequently go through Buyer’s remorse and it is a powerful experience for them. As the cost of acquiring a new customer is much higher than maintaining a customer, the marketers of products and services whose purchase are recurring try to minimize Buyer’s remorse and maximize Post purchase rationalization for their offerings to ensure repeat purchases.
Many marketers provide a coupon towards a future purchase at the point of sale. This has benefits for both the consumer and seller. First, the consumer is more likely to purchase again with the coupon, which will result in a higher percentage of repeat customers. Buyer’s remorse is less likely to be experienced each successive time a purchase is made and is deemed satisfactory.
Another technique is the money back guarantee that entitles the customer to a full refund in case of dissatisfaction post-purchase. It lessens Buyer’s remorse because it makes the purchase decision changeable.
In addition, several countries have enforced regulations to a cooling-off period during which contracts may be cancelled, and goods returned for a full refund.
Some other practices marketers employ to secure customers with a higher customer lifetime value are.
1. Provide value well in advance and set expectations
Build a relationship based on agreed-upon benefits included in your communication or proposals. Do not give the customer false hopes that the product will solve all their problems. Instead, focus on how the product can and will improve their lives. If the customer feels assured of how the product will benefit them, there’s a much lower chance that they’ll feel disappointed.
2. Post Purchase communication
Buyer’s remorse can be curtailed by encouraging specific post-purchase behaviors. Progress emails about order processing, words of affirmation to reinforce your customer’s self-affirmation, and acts of closure like asking for review and reference can help post-purchase rationalization kick in.
On buyer’s front, one could employ the following strategies to avoid Buyer’s remorse:
1. Choose When to Choose
We must decide which choices in our lives really matter and focus our time and energy there, letting other opportunities pass. We will be able to choose less and feel better by restricting our options.
2. Satisfice More and Maximize Less
“It is maximizer who suffer the most in a culture that provides too many choices”-Paradox of Choice, Barry Schwartz
Maximizers’ expectations rarely fail to be fully met. Reducing the number of options we consider before making a decision and learning to accept “good enough” will simplify decision-making and increase satisfaction.
You are less likely to regret the purchase if you know more about a product before you buy. For high ticket purchases, being knowledgeable about your purchase and reviewing the experiences of others about the product can give you a better understanding of what you’re getting into.
4. Stick to Your Shopping List
To prevent buying things you don’t need and regretting later, make a detailed list of what you plan to buy before you shop and stick to it.
5. Sleep on it
For products or services that appeal to you emotionally, time can be a helpful indicator when determining if something is purchased on impulse or if it’s an item that could bring value to your life. Deciding to wait for a predetermined time ( a day or week) can help you make a rational buying decision.
6. And Finally, Anticipate Adaptation
“When life is hard, adaptation enables us to avoid the full brunt of the hardship. But when life is good, adaptation puts us on a “hedonic treadmill,” robbing us of the full measure of satisfaction we expect from each positive experience. We can’t prevent adaptation. What we can do is develop realistic expectations about how experiences change with time.”-Paradox of Choice, Barry Schwartz
We adapt to almost all the things that we experience regularly. We get used to our purchases, and any post-purchase highs or lows vanish with time.
Or in words of J. Cole,
“The bad news is nothing lasts forever,– J. Cole
The good news is nothing lasts forever.”