Anchors in the Aisle: Reference Prices and "Was" Prices

How shops use reference prices, bundles and comparisons to shape what feels like a good deal, and how to judge prices on their own terms.

Whether a price feels high or low depends heavily on what you compare it with. Economists call the comparison point a reference price. Retailers know this and design prices and displays to shape the comparison.

“Was” prices

A label showing “was 2,000, now 1,500” creates a reference price of 2,000, making 1,500 feel like a bargain. This is a form of anchoring, where an initial number influences later judgements. Consumer protection authorities in many countries require that “was” prices be genuine, meaning the product was actually sold at that price for a reasonable period.

Expensive items as anchors

Shops and restaurants sometimes place a very expensive item next to others. A menu with one dish at a very high price makes other dishes seem reasonable. An electronics shop may display a very expensive television first, so mid-range models feel affordable.

Bundling

Bundling sells several items together at a single price, such as a meal deal or a phone with accessories. Bundles can offer real savings, but they also make it harder to compare the price of each part, and may include items you would not have bought separately.

Framing

The same price can be presented in different ways. “Only 30 rupees a day” sounds smaller than “900 rupees a month”, though they are nearly the same. Subscription services often use daily or weekly figures for this reason.

The meal deal

A café sells a sandwich for 5 dollars, a drink for 2 dollars and a snack for 2 dollars, or all three for 7 dollars. For someone who wanted all three, the bundle saves 2 dollars. For someone who only wanted the sandwich and a drink, the bundle costs the same as buying them separately, but adds a snack they did not want, which may encourage extra spending the café profits from.

Judging prices yourself

Ways to resist anchoring include:

Deciding what an item is worth to you before looking at the “was” price.
Comparing unit prices across shops.
Converting daily or weekly prices to monthly or yearly totals.
Asking whether you would buy the item at this price without the discount label.

Thinking a big discount means a low price

A large percentage off a high reference price can still leave a high price. What matters is the actual price compared with alternatives and with what the item is worth to you, not the size of the discount.

Key takeaways

A reference price is the comparison point that makes a price feel high or low.
"Was" prices and expensive items nearby act as anchors.
Bundling and daily-price framing can make comparisons harder.
Judging price against alternatives and your own needs helps resist anchoring.