The hidden FEE in COFFEE.

Marketers figured out this glitch in our human brains that can be used to make us pay more for things. On top of that, this glitch makes me feel like we are the ones finding the bargain price. It makes us feel like we are the ones who are ‘getting away with it.'

The psychological marketing trick is called ‘The Decoy Effect’. Once you read the examples, you'll be floored by how many times you've been victim of it. But first we need to quickly understand what it is. What is ‘The Decoy Effect?’ In one simple run-on sentence, the decoy effect appears when you are choosing between buying options and one of those options is a ‘decoy’ option which is so blatantly weak as an option compared to the others, that it lures you into choosing one of the other options because your brain thinks it found a better deal.

Here’s a coffee example. You go to buy coffee and are presented with two options. A really small coffee for $2 and a large coffee for $8. Most people would consider $8 for a coffee way too expensive and settle for the $2 coffee, but the coffee shop makes the most money on the mark-up of the $8 coffee. But how can they get you to buy that? Simply by introducing a third option, the decoy, a sneaky medium sized coffee for $7. And that third option changes everything.

Now your brain sees an opportunity. It sees that it can get a large coffee for only a dollar more than a medium. “I am so smart to have noticed that”, your brain tells itself. “I totally got away with getting such a good deal.” But now that you read this, you know the truth. You know that you were manipulated into buying that $8 coffee which you normally would have scoffed at. It gets crazier.

We know about the decoy option, but we should also know about the target option. The target is the $8 coffee, it’s what the company wants you to buy and will modify the decoy accordingly. If for some reason they wanted you to buy the small, they would make the small cup as big as the medium cup but price the medium cup way higher than the small.

In this way, you can be convinced to buy just about anything. Yes, anything. Why do you buy the large popcorn in movie theatres? The decoy effect. Why are there always three subscriptions models? The basic, advance and pro+ plans? Decoy effect. Laptops, gym memberships, hotel rooms. Anytime you see three purchase options, it’s likely you are dealing with the decoy effect. Heck, I bet there is some unintentional version of the decoy effect when choosing your starting Pokémon. Sorry Bulbasaur.

The real bad news is the fact this decoy effect robs you of being able to buy with intention rather than buying based on pricing strategies. Did you really want the large coffee regardless of price? Then of course you should get it. However, if you bought it because you got tricked into buying it, then not only are you paying the price of a large coffee but also the price of your free will.

That is the hidden fee in coffee.