Afford Anything Podcast: The Psychology of Sales, Discounts and Deals [GREATEST HITS VAULT] Host: Paula Pant | Guest: Jeff Kreisler, behavioral economist and co-author of Dollars and Cents Original Air Date: January 2020 (Replayed Nov 28, 2025) Episode Overview
This episode dives into the fascinating psychology behind sales, discounts, and deals, exploring why we’re drawn to bargains and how retailers use behavioral science to guide our spending. Host Paula Pant and guest Jeff Kreisler pull back the curtain on the emotional traps and mental shortcuts we fall into with money, showing us where we “get in our own way”—and what to do about it. The conversation ranges from emotional influences on financial decisions, to the hidden power of the “pain of paying,” to practical ways we can outsmart our irrational tendencies and align our spending with our values.

Key Discussion Points The Emotional Roots of Money Mistakes
03:00–07:00

• Financial decisions are emotional, not just logistical or rational (“Money... we think it’s just coldhearted decision making... The truth is that financial decisions, like all of our decisions in life, are driven by emotions.” – Jeff, 02:44)
• Even experts and financial professionals make emotional mistakes with their own money.

Mental Shortcuts & Behavioral Biases
Opportunity Cost Blindness

• We struggle to see what else our money could do, especially with large purchases (the Honda dealership experiment, 06:50)
• Habitual spending becomes automated and unquestioned—what starts as a conscious decision (a daily latte) quickly becomes an unconscious routine (08:00–08:45)

The Relativity Principle & “Winning” at Sales
09:00–17:00

• We’re drawn to deals that show a discount from a higher price, regardless of actual value.
• The JCPenney “Fair and Square” story: moving to transparent pricing backfired, showing how much people are attached to the thrill of bargains (09:17–13:45)
  • “Instead of making people jump through all these hoops... let’s just list everything at the price that it’s worth... and everybody hated it.” – Jeff, 09:31
• Other brands (Trader Joe’s, Carvana) succeed with no-sales models if that’s baked in from the start.

Nudges vs. “Dark Nudges”
14:30–18:00

• Companies design experiences for easy, quick, and frequent spending (Amazon, Uber, casinos).
• The thin ethical line: “sludge” tactics (behavioral science designed for the company’s benefit, not yours).
• Transparency, opt-out ability, and being in the user's best interest are the “fairness” tests for behavioral nudges.

The “Pain of Paying” and How We Numb It
18:26–22:00

• Paying with cash activates the same brain areas as physical pain; pain is meant to make us pause and reflect.
• Technology (credit cards, one-click buying, Apple Pay, etc.) numbs this pain and leads to less thoughtful spending.
  • “Cash is the most painful... the less painful it is, the more likely we are to make less conscious and less thoughtful decisions.” – Jeff, 21:17
• Automation can also be used for good (e.g., automating savings).

Debit vs. Credit Card Psychology
26:00–28:45

• Debit cards are more “painful” than credit because they deduct from real balances immediately—loss aversion is triggered.
• Most people think about their spending in terms of what’s in their checking accounts, not credit balances.
  • “If you’re a person who your credit card balance is something that you’re very aware of, then using a credit card will be more painful, perhaps, than a debit card...” – Jeff, 27:08

Other Common Money Mistakes
The Endowment Effect
28:55–31:45

• When we own something, we value it more, even if objectively it’s worth the same or less (mug experiment, home sales, brand loyalty).
• Overvaluing what we own leads to overspending or bad pricing decisions.

Overpaying for Effort
31:51–36:00

• We value effort, sometimes irrationally (the locksmith example: people pay more for an hour’s struggle than for competent speed).
• Services use “operational transparency” (progress bars, open kitchens) to show effort and increase perceived value.
• “Artisanal” and flowery language are cues we overpay for because they signal effort, uniqueness, or exclusivity.

Mental Accounting & Money “Buckets”
48:40–49:02

• We treat money differently based on its source or context (bonuses vs. salary, Venmo balances vs. checking account money).

Practical Strategies & Solutions
Recognize and Preempt Your Triggers
39:50–41:40

• Identifying which traps you fall into (sales, discretionary overspending, brand loyalty) is the crucial first step.
• Design automatic systems: set up your financial environment so that the right choice is unconscious and easy.

Specific Tactics for Better Money Habits
Automatic Transfers
40:04–41:15

• Hide money from yourself by having direct deposits split into savings accounts you don’t see daily. This “artificial scarcity” reduces discretionary spending.

Make Future Consequences Concrete
41:40–43:45

• The more specific you are about future goals (retirement date, travel plans), the easier it is to save for them. Make the future personal, detailed, and vivid.

Make Saving Visible
45:50–47:10

• Savings are usually invisible (compared to visible “stuff” you buy). Counter that by tracking progress, displaying savings growth, or using visual cues to reinforce your good choices and trigger your identity as a “saver.”

Identity and Community
63:04–63:35

• Building communities and identities around savings and financial independence (like the FIRE movement) provides encouragement, visibility, and reinforcement for positive financial behavior.

Notable Quotes & Memorable Moments

• “Money as this lure... we think it’s just coldhearted decision making... The truth of the matter is financial decisions, like all of our decisions in life, are driven by emotions.” – Jeff (02:44)
• “We love the easy solution. That feels good.” – Jeff (51:05)
• “Sometimes the value to you as a person is worth it. Again, though, are you making that decision consciously, or are you being tricked into it?” – Jeff (31:04)
• “When we pay for something, when we hand over a $20 bill at a counter, it stimulates the same region of our brain as physical pain does.” – Jeff (54:36)
• “It's why loyalty programs work, because you become connected to a product or service. It’s pretty powerful. And again, like many of these things, it’s very unconscious.” – Jeff (29:31)
• “The good choices are often the ones that aren’t rewarded and aren’t part of our competitive culture and aren’t seen.” – Jeff (46:39)

Timestamps for Key Segments

• 02:44 – Financial decisions are emotional
• 09:17 – The JCPenney “fair and square pricing” story
• 14:34 – Ethical “nudges” and behavioral science in commerce
• 18:26 – The pain of paying and how technology removes it
• 26:00 – Debit vs. credit card psychology
• 28:55 – The endowment effect and brand loyalty
• 31:51 – Overpaying for effort and operational transparency
• 39:50 – How to identify and address your financial weak spots
• 41:40 – Make future goals specific and personal
• 45:50 – Making savings visible and tangible

Actionable Takeaways (as summarized by Paula at end of episode) Five Money Mistakes:

1. Overvaluing sales, discounts, and deals
2. Ignoring opportunity costs by mentally earmarking money
3. Numbing the pain of paying (via credit cards, automation, etc.)
4. Separating the time of payment from time of consumption (subscriptions, memberships)
5. Overvaluing what you already own (the endowment effect)

Four Solutions:

1. Make your future and your goals specific, personal, and concrete
2. Hide money from yourself—set up automatic, “invisible” savings
3. Make saving and investing visible and tangible (track and display progress)
4. Create an identity around your financial goals—join communities that reinforce those values

For more, visit the full show notes and actionable resources at affordanything.com/episode238.

If you’d like more detail on a particular segment or want a condensed key takeaways list, let me know!