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You head to Costco (Nasdaq: COST - News) to stock up on staples -- say, paper towels and cleaning supplies -- but you walk out with three salmon filets, a tub of cream puffs, and a ream of printer paper. Why?
Most of us are notoriously poor at assessing a true bargain, says C.W. Park, professor of marketing at the Marshall School of Business at the University of Southern California, and editor of The Journal of Consumer Psychology. Seduced by the prospect of saving money, we give in to impulse buys. Eventually, we regret the purchase or throw much of a past-its-prime product away. It's called the Costco Effect, and it's actually part of the store's incredibly successful retail strategy. But the effect on your wallet is that you spent more than you would have if you'd never seen that "bargain."
1. Designer Clothes
2. Imported Shrimp
3. Sheets and Towels
4. 12-Pound Crates of Navel Oranges