Pennies-a-Day Pricing

What it is

John Gourville proposed that people first recall a comparison point and then judge the transaction against it; a small recurring charge brings small, ongoing expenses to mind, while an aggregate brings large, infrequent expenses to mind. Laboratory studies across several product categories supported the effectiveness of the frame and the two-step account.

In effect

In the article on buy now, pay later, the instalment on screen at checkout works as a small recurring charge.

What it does not say

The framing changes how a cost is judged, not the total. The studies used laboratory scenarios and not real purchases.

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