Money Psychology

What is Buyer’s Remorse, and How Can You Avoid it?

July 13, 2023

Jacob, a 30-year-old IT Technician with a monthly salary of Ksh65,000, was excited when he purchased a high-end TV on a buy now, pay later scheme. He went into the purchase with a lot of excitement—the hope that the tv he bought would change his life, be of the highest quality, or fill some sort of need he had.

However, within days, he was overwhelmed by guilt. He realised he only bought the TV to impress his friends, who all owned high-end models.

Now burdened with regret, Jacob reluctantly made monthly repayments. Yet, with each installment, he yearned for the opportunity to redirect that money toward his retirement fund or to save for future investments, like purchasing land. But he couldn’t, at least until he was done paying for the TV.

After buying the TV, Jacob was experiencing buyer remorse, and everyone has had to deal with it at some point. There are many reasons we buy something and later regret it. Sometimes we weren’t thinking clearly when we made the purchase decision. Other times, we made the right decision, but our current feelings didn't match our initial expectations.

In this article, we’ll explore buyer's remorse in detail and what you can do to prevent it.

What is Buyer's Remorse?

Buyer’s remorse is the lingering feeling of regret and guilt that you can sometimes get after you make a purchase. It can be a big purchase outside your budget or a small impulsive purchase.

It is a sinking feeling you get in your stomach after spending money in a way you shouldn’t have.

Buyer’s remorse happens after you have made the payment. It can be immediately after you’ve stepped out of the shop/supermarket, and you start questioning whether the purchase was worth it. Or it can happen days or months later. And for more significant purchases like a car or a home, it can manifest itself after years.

As regret and guilt seeps in, you will start judging your decision. Here, a few things will happen, you’ll look for ways to justify those purchases in order to get rid of buyer’s remorse, or you will find ways to reverse it, such as returning the item or reselling it.

But as with every financial regret, the best way to deal with buyer’s remorse is to take steps to prevent it.

How to Avoid Buyers Remorse

Buyer's remorse sneaks in like an unwelcome guest, leaving you second-guessing your decision and feeling a sense of regret. The truth is that whenever you spend money, there is the potential for buyer’s remorse, and it often doesn’t matter how much you’ve spent.

Nonetheless, to avoid buyer's remorse, it is important to understand its main causes. They include:

Product not meeting expectations: This could be due to quality, performance, or functionality issues. When the experience falls short of what you anticipated, it can lead to disappointment and regret.

Unused product: It could be due to changing needs, lack of interest, or simply not finding the opportunity to utilise the product effectively. Realising that the purchased item is sitting unused can trigger feelings of wasted money and regret.
Perception of overspending: Buyer's remorse can stem from believing you've spent too much money on a product. This could happen when the price for the item drops or you discover similar products at a lower cost.
Discovering a better alternative: Sometimes, after making a purchase, you come across a similar product that offers better features or quality. This realisation can lead to regret and dissatisfaction with your initial decision.
Unnecessary purchase: Buyer's remorse can arise when you realise that you didn't actually need the product you bought and get frustrated about your decision.

Now that you understand the causes of buyer’s remorse, here is how to avoid it.

Do Pre-purchase Research

Thoroughly researching the product or service you’re considering can help you make a more informed decision. This will ensure you find the product with the best quality and the right price for your budget. You are less likely to second guess your purchase decision when you have taken time to reach that decision.

To conduct your research, start by reading reviews, as it allows you to benefit from the experiences of others who have already used or purchased the product or service you’re considering.

Next, compare prices. Different sellers and retailers may offer the same product or service at varying prices, and by comparing them, you can ensure that you’re getting the most competitive price available.

Finally, gather as much information as possible to help you get a comprehensive understanding of what you are buying. This information will help you set realistic expectations and avoid post-purchase surprises or disappointments.

Make a Budget to Manage Spending

It’s easy to overspend and regret it later when you don’t plan how to spend your money. To avoid buyer’s remorse, consider creating and sticking to a budget.

Of course, setting a budget isn’t entirely foolproof since you may still overspend. That is why having a spending plan is an essential first step to making wise decisions. For instance, when shopping, consider having a list and knowing how much you intend to spend – then stick to that list. You will be able to prioritise your needs.

Buyer’s remorse will be inevitable when you go beyond your spending limit and experience financial strains caused by a budget deficit. To avoid this, ensure your budget factors in all your purchases.

Plan Purchases Using Sinking Funds

A sinking fund is a dedicated, often separate, fund or savings account that enables you to set aside money for future planned purchases. Typically, this involves saving a small amount each month for a specific period before purchasing.

One of the primary causes of buyer's remorse is poor spending habits, such as spending without a plan, making impulse purchases, and buying items on credit.

When you carefully plan your purchases with sinking funds, you can avoid temptations that lead to impulsive buying, make purchases with cash hence avoiding unnecessary debt, and establish a budget for unnecessary expenses. You can create a fund specifically for miscellaneous items, which will alleviate any guilt when you spend money since you have spent months planning for the expenditure.

Take 24 Hours to Reflect

To minimise the chances of experiencing buyer's remorse, consider allocating sufficient time before finalising a purchase. This will help you avoid making impulsive decisions by creating a cooling-off period. Take at least 24 hours, if not more, to contemplate whether the item you are considering is truly worth the money and if it is something you genuinely need.

The cooling-off period allows you to reflect on your needs and assess whether the purchase aligns with your values and goals. If you still have valid reasons to buy the product after waking up the next day, it will likely be worthwhile.

The cooling-off strategy can also help you resist the allure of "fear of missing out," a tactic employed by supermarkets and merchants during sales events. These events often trigger impulsive buying decisions that later result in regret. While promotional discounts may seem enticing at the moment, no amount of savings can compensate for purchasing a product that is neither desired nor necessary.

Consider Alternatives

Comparing alternatives offers several benefits that can help prevent future regret:

You will spend money on something that matches your needs and fulfills your desires.
You will learn about additional or unique features to understand your purchase better.
You will have multiple options that will make negotiations easier, ensuring you eventually get the best deal and avoid being short-changed.
You can evaluate the quality of different products or services when comparing alternatives. This helps you choose a high-quality product that meets your requirements.

When you shop around, you’ll have more info to support your final decision. Maybe your initial hunch was correct, or perhaps you found something better, but now you’ll have what you need to make a purchase decision you are less likely to regret and you’ll be more satisfied with how you spent your money.

Understand Your Buying Motivations

The best way to avoid regretful purchases is to exercise conscious spending. You can't be 100% sure every purchase decision you make is correct, but there's something you can do to predict which ones aren't.

To avoid buyer's remorse, you need to understand your buying motivation: the psychological factors that encourage and influence your spending decision.

To understand if your buying motivation is wrong or right, you should ask yourself the following questions before spending money:

Why am I buying this product/service? - If it is something you need and have use for, you are less likely to regret it later. However, if you buy it out of fear, to show off, or keep up with the Joneses, your decision might haunt you later.

Is this intentional/rational spending or emotional spending? - Instead of making impulsive purchases based on emotional impulses or fleeting desires of pleasure shopping, intentional spending involves thoughtful consideration and decision-making based on logical reasoning and personal values. Emotional spending results from psychological triggers, and you'll likely regret it later.

Consider the Return Policy

It's impossible to predict whether a product will lead to buyer's remorse in the future. However, you can take specific steps to minimise the risk and be prepared if it happens. One of those steps is to carefully review the return policy and terms before purchasing.

Different retailers will offer different return terms. Some will provide you with a 100% refund, others will offer to exchange the products, and others will charge you an inconvenience fee but accept the return. Return policies have eligibility terms. Ensure to familiarise yourself with these details in advance to help you make an informed decision.

Still, most sell on "goods once sold are not returnable terms." If the merchant you are buying from doesn't have a return policy, consider warranties and guarantees. Some manufacturers offer their own warranties or guarantees that may be separate from the merchant's return policy.

WRAPPING UP

Buyer’s remorse is a common experience that can leave you feeling regretful and dissatisfied with your purchases. It is a lingering feeling that can persist for some time. There’s typically no benefit in dwelling on it, especially if they can’t revere it. Instead, focus on finding ways to maximise your purchase’s value and enjoyment when there are no constructive solutions to address your concerns.

Finally, if you are experiencing guilt and disappointment following a recent purchase, consider it a chance to learn and grow. Take time to reflect on past purchases, identify patterns or triggers, and use those insights to make more informed future buying decisions. This will ensure a happier and more satisfying shopping experience.

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Farah Nurow is an experienced Content Writer who enjoys writing creative and educative articles meant to provoke readers' thoughts. He loves sunny weather and thick books. You can connect with him on LinkedIn.