More than half of consumers said they’ve spent $100 or more on an impulse buy
Spontaneous spenders, you have plenty of company.
According to a new CreditCards.com poll, 5 in 6 Americans say they have made impulse buys, most commonly in person, most commonly for ourselves.
While most of the splurges are inexpensive, more than half of poll respondents say they have spent $100 or more on an impulse buy (54 percent) and another 20 percent said they’ve spent at least $1,000 on impulse.
“We aren’t rational beings, we rationalize our actions — especially with money,” said Brad Klontz, co-founder of the Financial Psychology Institute and associate professor of economics and finance at Creighton University.
The CreditCards.com poll took a deep look at our shallow shopping habits:
- Eighty-four percent of poll respondents say they’ve made an impulse purchase at some time, and 77 percent in the past three months.
- Nearly 8 in 10 (79 percent) made most of their impulse purchases in a store. While many of us rely on our mobile devices, only 6 percent made the most spontaneous buys on a smartphone or tablet.
- Impulse buys are most often made to fulfill a selfish desire, with 47 percent of us buying for ourselves, but that’s especially true for those in the young. Of those in the 18-29 age bracket, 61 percent said they made most impulse purchases for themselves. Consumers age 30-49 are the most likely to impulse-buy for a child; those 65-plus are the most likely to buy for a spouse or significant other.
- Impulsive purchases decrease with age: 20 percent of seniors say they have never made an impulse purchase — more than any other age group. Only 8 percent of people under age 50 have never made an impulse purchase.
- Big earners are big impulse spenders: One-third of consumers who make more than $75,000 a year have made an impulse purchase of $1,000 or more.
The CreditCards.com survey was conducted by Princeton Survey Research Associates International via landline and cellphone calls during early January (see methodology). The 1,003 U.S. adults polled were asked about their impulse purchases, which were defined as unplanned or unnecessary decisions to buy a product just before the purchase was made.
Consumers splurge more with less
The number of impulsive purchases is on the rise. In a similar poll conducted in 2014, 75 percent of respondents claimed to shop impulsively compared to 84 percent of surveyed consumers in the new poll.
To author and certified financial planner Karen Lee, it’s not surprising consumers are more free with their cash these days. “I think the price of gas falling so much has made a difference,” she said. “What people are saving at pump, they are spending.”
While consumers may feel as if they may have more money in their pockets, research reveals they aren’t spending as much as they were two years ago.
In 2014, 16 percent of poll respondents said they spent $500 or more on an impulse buy, but this year only 10 percent reported spending that much. According to the poll, 20 percent of impulse buys made over the past three months were under $25. And despite the lure of the holiday shopping season, only about one in four consumers (26 percent) made an impulse buy for more than $100 over the past three months.
Lingering fears of financial trouble may still cause some shoppers to hesitate before plunking down the cash or charging a large purchase these days.
Consumers witnessed “the largest market drops last week since 2008. For many people it’s reminiscent of the financially traumatic experience of watching your life savings dwindle during the Great Recession,” Klontz said.
HOW IMPULSE BUYS ARE MADE
|On smartphone or tablet|
MOST SPENT ON AN IMPULSE BUY
(in the past 3 months)
|Less than $25|
|$1,000 or more|
Brick-and-mortar trumps online
Even though online shopping has exploded in recent years — accounting for 45 percent of 2015 holiday shopping — it’s the retail stores that continue to capture careless spending.
Nearly 8 in 10 Americans (79 percent) made most of their impulse purchases in a store, according to the poll. Another 13 percent said they used computers for impulse buys; just 6 percent said they used a smartphone or tablet.
Experts aren’t surprised. “When something is tangible and is right in front of you, it sparks the impulse to buy more than a picture on your phone,” Lee said.
For retailers, it’s all about triggering an emotional response that will encourage more spending. “They don’t put ‘Scientific American’ at the checkout for a reason,” Klontz explained. “They place magazines like ‘The National Enquirer’ and candy. Those things are more likely to make you feel emotions, like jealously, curiosity and desire.”
When something is tangible and is right in front of you, it sparks the impulse to buy more than a picture on your phone.
|— Karen Lee|
Author and certified financial planner
If an impulse buy is made online, the shopper is probably younger. While only 13 percent of respondents said they’ve used a computer to shop impulsively, that number jumps to 20 percent for 18- to 29-year-olds. Despite their reputation for tech savvy, only 7 percent of that age group made most of their impulse purchases on a smartphone or tablet.
Even if you’re attached to a mobile device 24/7, it might be easier to curtail impulsive shopping online if extra time or steps are needed to complete transactions, according to Rachna Ahlawat, founder and vice president of Ondot Systems, a mobile payment software development company.
“You might have to give your card number, shipping address and go through other steps that basically keep asking you, ‘Are you sure?’ and, ‘Is this correct?'” she said. “By the time you get through all that, you might realize you aren’t sure and stop right there. In a store, you end up making an impulse buy because you swipe the card and it’s done.”
Impulse buys are often selfish
If you’ve ever made a quick, unplanned purchase, odds are you bought something for yourself. Of all those who impulse-buy, 47 percent said most of the time their purchases were for themselves. Another 21percent cited a child and 16 percent said their spouse or significant other was the lucky recipient of an impulse purchase.
Unplanned purchases often instantly fulfill some kind of emotional need, like a pick-me-up after a hard work day, says Klontz.
“It’s an immediacy issue,” he said. “When we become emotionally flooded, we also become rationally challenged. If you are really anxious or scared, your prefrontal cortex basically shuts down and that’s where long-term consequences and judgements are evaluated.”
When your judgement is impaired, buying a pair of designer shoes or high-end bottle of wine may seem like the best idea in the world — even if it busts your budget that week.
CreditCards.com found millennials comprise the demographic most likely (61 percent) to buy an unplanned purchase for themselves. This might also have to do with brain function, said Klontz.
“The prefrontal cortex isn’t totally developed until age 24 or 25 for men,” he explained. And a 21-year-old woman won’t make a decision the same way a 40-year-old woman would. “You are more susceptible to having financial problems and control impulses when you are younger,” he added.
Fortunately, financial reasoning abilities typically improve with time and experience. “I have found people become more self-reflective as they get older,” Lee said.
If nothing else, the older you get, the less selfish your impulse purchases may become, as the CreditCards.com poll found. Consumers aged 30-49 are most likely to spontaneously buy something for a child and those older than 65 are more likely to impulsively buy something for their spouse or significant other.
Lack of spare cash controls impulsivity
Unsurprisingly, those who make the most money are also the most likely to spend big bucks on a whim.
According to the poll, 24 percent of consumers who make more than $75,000 a year said they’ve spent $100-$500 on an impulse buy in the past three months. Another 10 percent of consumers in the same income bracket said they’ve spent more than $1,000 on an impulsive purchase recently.
“They feel like they have the money and they have the right to spend it,” Lee said. “I think there is a trigger in your brain that goes, ‘I earn six figures, so I can afford it.’ And then the money gets spent. Lower income folks already know they can’t afford it so they don’t spend it.”
While only 13 percent of all surveyed consumers have never made an impulse buy, 30 percent of those who make less than $30,000 annually said they have not made an impulse purchase of any amount over the past three months. The statistics are similar for those with little to no employment: 26 percent of part-time employed consumers and 32 percent of unemployed consumers said they haven’t made an impulse buy in the past three months.
Based on her own observations of consumer buying habits, Ahlawat said fear of increased financial insecurity helps many keep spending in check.
Seniors, many of whom live on fixed incomes, are also less impulsive. Of those 65 and older, 37 percent said they have not made an impulse buy in the past three months.
While some people don’t have to worry much about how they spend money, the majority of people do need to watch what they spend.
“You’ve got to be conscious of what you are spending,” Lee said. “Not everyone can truly afford to be so impulsive.”
For advice on controlling spontaneous shopping, see “4 tips to minimize impulse buying.”
The poll was conducted by Princeton Survey Research Associates International for CreditCards.com January 7-10, 2016. PSRAI contacted a random sample of 1,003 adults living in the continental United States. Interviews were conducted in English and Spanish by landline (500) and cellphone (503, including 340 without a landline phone). Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error is \xb1 3.6 percentage pointsfor the complete set of weighted data , and \xb1 3.9 percentage points for the subset of 843 people who said they have made an impulse purchase.