Thinking About Money? Stop Before You Shop

New research finds that being reminded of money can affect purchasing decisions.

Two women walking out of a shopping mall
MoneyHP -- Shopping

How many times a day do you think about money? If you kept track, you might notice dozens of small money reminders sprinkled throughout your day, from movie titles (Wall Street: Money Never Sleeps) to songs (Money, Money, Money) to handing a $5 bill to a cashier.

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That, it turns out, can lead to less-than-optimal purchasing decisions. The Journal of Consumer Research reports that being reminded of money can influence how consumers evaluate products. That’s because money reminders tend to lead to more abstract thought, which can mean being swayed by brand names or focusing more on the primary features of products, such as the sound quality of a radio or the picture quality of a television, instead of smaller details, such as the readability of the built-in clock or the design.

The reasons behind that effect are complicated. Thinking about money, the researchers report, often leads people to think about their own strength and resources. They point out that money symbolizes power, freedom, and social status. As a result, when people think about money, they tend to feel stronger. Studies have even found that people led to think about money tend to ask for help less and feel less physical pain than control groups. The mere thought of money, in other words, can be pretty powerful stuff.

Interestingly, researchers have also found that how money makes people feel varies widely by circumstance. If researchers remind people of money they have spent, instead of the mere concept of money, then they tend to feel weaker than control groups. And for some people, the thought of money reminds them of unpaid bills or other stresses, which can lead to feelings of weakness.

Still, the researchers found that money reminders that evoke wealth and strength tend to encourage people to think more abstractly about purchasing decisions. In one experiment, researchers asked participants to fill out a survey. The survey included an exercise in unscrambling groups of words, some of which included terms that evoked a lot of money or resources, such as wealth, expensive, and millionaire. (The control group’s words contained no such money references.)

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Then, participants were asked to choose between two descriptions of the same action, one which was more abstract than the other. (For example, making a list could be “getting organized” or “writing things down.”) The participants primed with the money words were more likely to select the abstract descriptions.

The researchers also looked directly at the effect of money reminders on consumer decisions. If thinking about money leads us to think more abstractly, does that mean we also shop differently after thinking about money? The answer, it turns out, is yes.

One group of participants was primed to think about money with pictures of credit cards and cash. (They were also asked which they preferred.) The control group was shown photos of a radio and CDs, or a grocery store and laptop.

Then, the researchers asked participants to imagine they were purchasing a radio. Some participants were asked if they would be satisfied if the sound worked fine, but the clock was hard to read. Others were asked if they would be satisfied if sound quality was poor but the clock display was useful.

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The researchers found that participants primed to think about money were more likely to care most about the central feature, the sound quality, than the control groups did. In other words, when consumers are primed with money reminders and, as a result, are thinking more abstractly, they are more likely to focus on products’ central features than those who haven’t been reminded of money. In the case of a new dishwasher, for example, that might mean focusing just on how clean the appliance makes dishes, and less on the various types of available cycles.

In a related experiment, the researchers found that participants primed with money reminders were more likely to be swayed by brand names and rate brand-name products more highly than control groups. Again, the researchers suggest that this is because the money reminders led participants to think more abstractly.

Based on their findings, the researchers urge consumers to be aware of how being reminded of money can influence their own purchasing decisions. Even product descriptions themselves, if they evoke thoughts of wealth or affluence, can have an impact on consumers’ decisions. Given how often we’re reminded of money every day, the researchers conclude, consumers deserve to know the psychological ramifications.