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How to Avoid Buyer's Remorse

When Consha Griffin, 29, first spotted the black, tan and red Gucci handbag she would eventually decide to purchase, she mulled over the decision with her husband. Griffin, a finance manager in San Francisco for a large information technology company, knew she could afford it, and given her professional success, that she might even deserve it. But paying $1,245 for a handbag was still a difficult hurdle for her to overcome.

"I give a lot of financial advice to friends, and I didn't want to be the person handing out financial advice and carrying such an expensive bag," she says. Still, after gazing longingly at the bag on the Gucci website for six months, she decided to buy it. Shortly afterward, she regretted her decision. "It's impractical," she says, adding that she doesn't even bring it to work because she's embarrassed of the high price tag. "People will think, 'Who does she think she is? How much is she getting paid?'" she jokes.

Buyer's remorse, especially for high-ticket items, happens all the time, and it makes everyone involved unhappy: Customers regret their purchases and wish they had their money back. Brands and stores lose too, because they're left with unhappy shoppers who don't want to return to the store. According to a forthcoming paper published in the June issue of the Journal of Consumer Research co-authored by Kelly Kiyeon Lee, a post-doctorate fellow at the Olin Business School at Washington University in St. Louis, there are steps both consumers and retailers can take to reduce the chance of buyer's remorse.

[Read: 5 Blogs That Will Save Your Money.]

Lee's paper takes a close look at the trade-offs people tend to make when evaluating products, particularly the tendency to value convenience more in the short term and functionality more in the long term. In other words, a consumer who needs a camera for a vacation tomorrow is more likely to buy the easiest-to-use version, and then later regret that the camera lacks higher-level attributes. At the same time, a consumer who plans to use photo editing software at a future date is more likely to pick the more complex, sophisticated product, and then when the time comes to actually use it, he wishes he had selected an easier-to-use version.

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"Consumers prefer high-functionality in the long term and convenient products in the short term," Lee says. To help consumers avoid experiencing buyer's remorse, she suggests taking time to stop and really consider the value of the product, including the benefits in the short and long term. If left to their own devices, consumers tend to focus more on the near-term payoff.

She also suggests that people pay more attention to price.The study found that activating the part of the brain that considers money by having people count out a stack of bills helped encourage them to then select products that offered greater functionality.

[Read: How to Start Saving More Now.]

On that same note, companies can help customers avoid making purchases they come to regret by reminding them about the price, even after the purchase. A gym might want to remind clients how much they paid for their membership on a weekly or monthly basis, Lee suggests, because that will encourage them to take advantage of the membership by visiting the gym to work out, which will reduce the chance of buyer's remorse. "Any kind of membership-based retailer could use that to increase long-term satisfaction," Lee says.

Those tips might not help Griffin, though, because high-end products like Gucci bags don't really come with a convenience versus functionality trade-off. Yet Griffin has drawn her own lessons from the experience. "If I hadn't bought the bag, I would have felt like I was missing out," she says. But since she made the purchase, she knows it didn't give her the pleasure she had anticipated. Even the purchase itself at the Gucci store was relatively banal; she was expecting more of a "princess, red carpet" treatment. That realization in itself will help prevent her from splurging on other luxury items, she says.

[See: 11 Money Tips for Women.]

She also doesn't use the bag as much as she had expected since she feels like it doesn't quite fit into to her otherwise-frugal lifestyle, and she was surprised by the expense of the upkeep. Cleaning the bag or replacing a strap would cost a couple hundred dollars, she notes.

Despite her disappointment, Griffin says she might buy a Gucci handbag again one day -- if she's also ready to upgrade the rest of her lifestyle so the bag blends right in. "If I became a vice president or had several promotions, and I get to the point where I'm making enough money to live that type of luxurious lifestyle, then potentially, I might buy another one. But not now," she says.

In the meantime, she hopes others can learn from her mistake.



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