Wealth Extraction: Consumer Traps to Watch Out For Part 2

March 30, 2018 Stu Q

We have all been flipping through the channels of the TV when we come across some type of advertisement, right? It is always the item which we never even thought we needed. However, we get enthralled with the idea of needing the item they are discussing in front of our eyes. How in the world did we ever survive without it? For 5 easy payments of $29.99, it can be ours!

STOP

Although you might be reaching for the phone and your credit card, stop for a minute. This is what is best described as WEALTH EXTRACTION. Anything which will debit your account for the sole purpose of providing something of very little value or satisfaction to your life can easily be put under this label. Even if you “think” this is worth the price you are paying for it now, I can nearly guarantee you will barely use it within six months. A year from now it will likely be collecting dust in a drawer or would have broken.

Key Phrases or Points to Watch

There are some key characteristics of items which might be subjugated to wealth extraction. One of the first things to look out for is where you are seeing the information for the item. If it is on a shopping station, pop-up ad, or random mailers, you should avoid them. If they offer you what appears to be a great payment option (i.e. 6 payments of $19.99 – Order Now!) you are about to spend probably 30%-40% more than it is worth, just ignore these. One of the last key things to watch for is the storyline or video explanation. These typically will allow you to relate the most in the easiest ways, regardless of how ridiculous they seem (i.e. “Do you or someone you know struggle with opening a carton of milk?“). They seem ridiculous, but somehow we always end up with the Milk Master 2000 sitting in our drawer! These are all crucial to watch out for with wealth extraction!

Learn to Fight Back

These ads are meant to make people want to purchase their product. If you have fallen victim to these gimmicks and well-designed advertisements, it’s fine! Markets invest millions into ads to ensure they have the right psychological understanding of who their demographic is and who will likely buy. It is time to fight back though. The first thing you can do is shut off or limit your time with the devices for which you get the most ads. They can get you if you are not looking at them. The second thing I would suggest is to look at them from a bigger perspective (i.e. They are trying to get me to purchase knives, but mine only need to be sharpened to work that well). The third idea which I use is to make fun of the ads. I tend to laugh at the ads about the knives squashing the tomatoes. NOBODY WITH A TINY OUNCE OF SKILL CUTS A TOMATO LIKE THAT! Therefore, it is likely the user’s fault and not the knife.

These are some basics to understanding the wealth extraction we all have to deal with in our everyday lives. Know the signs. Prevent the financial losses.