7 retail pricing secrets revealed

Retail prices can be confusing. What does "list price" mean if nothing ever actually sells at list? When is a sale a genuine deal? Money Magazine explains why things cost what they do - and how to use that knowledge to get a better deal.

Lesson 5: Price-matching 'guarantees' may cost you money
Lesson 5: Price-matching 'guarantees' may cost you money
Some of your favorite retailers may offer to meet or beat a lower advertised price. Sweet, huh? You're wired to think so: A 2005 study in the Journal of Consumer Psychology shows that people generally perceive stores with price guarantees as being less expensive.

"But sometimes these stores actually have higher prices," reports the University of Colorado's Donald Lichtenstein. (Example: We found a Palm T/X Handheld for $300 at Staples, which has a "110 percent price-match guarantee," and for $267 at Amazon.com.) The business model works because the store can satisfy the few who bother to shop around. Everyone else pays more than MAP.

Before you buy, log on to a comparison-shopping engine such as Shopzilla, BizRate or Froogle. A 2002 study by the Consumer Literacy Consortium found that 16 minutes of comparing prices for a TV saved buyers $100 on average.

Lesson 1

Lesson 2

Lesson 3

Lesson 4

Lesson 5

Lesson 6

Lesson 7
Invest to win 2007 Money Magazine's new list of best mutual funds. Plus: 5 perfect money makeovers. (more)
Best Jobs in America Get compensation stats and demand forecasts. Research by Money Magazine and Salary.com. (more)
Top 10: Fastest-growing counties Maricopa County, Arizona added the most residents in the U.S. Census Bureau's latest ranking. (more)
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.