Why do sales and discounts work?

Answer: Psychology of getting a deal

Psychology of getting a deal ✓ — Correct! Discounts trigger psychological responses. People feel they're getting a deal and fear missing out. A $100 item marked down to $70 feels like saving $30, even if you weren't planning to buy it. Stores often raise prices first, then discount. The urgency and perceived value drive purchases!

Products actually cost less — Wrong. Production costs don't suddenly drop during sales. Stores often build the discount into their pricing strategy from the start, or use sales to move excess inventory.

Stores lose money to help — Wrong. Stores don't run sales to lose money. They use strategic pricing to increase total revenue by attracting more customers, clearing inventory, or competing with rivals.