The Restaurant Industry’s Ability to Make You Spend More Money

A little known secret of the restaurant industry is its easy ability to cause its patrons to spend more money than they would have otherwise. This does not come from the lure or temptation of food, but rather from the layout of the restaurant’s menu. By not placing dollar signs next to the prices on the menu, the restaurant sends signals to the customer that the prices are not actually money, which thereby causes the person to spend more than they would have liked. In a downward economy, this type of ploy makes all the difference in the restaurant business.

This study by the Cornell University School of Hospitality Research tested different visitors to St. Andrew’s restaurant in Hyde Park, New York with menus that had the price listed as dollar increments, simple numbers, and numbers that are written out ($20, 20, or twenty). The customers would spend more when the amount was written out in words, although it was determined that this was due to the lack of a currency sign next to the number. This survey has been well determined within the restaurant industries, with more and more businesses advertising their food without any sign of currency on their menu. Customers were found to spend 8 percent more without a dollar sign through this study, though it was surprising that the spelled-out format did not yield higher spending.

According to many leaders of the study, people who are more price conscious tend to add up prices in their head when going to a restaurant, but do not do this when the price is written out, or when there is no dollar sign next to it. The dollar sign inevitably comes to remind people that they are spending money, and the lack of the sign takes away this emphasis on money. Restaurants have thereby discovered that customers are more relaxed when they are not adding up the bill in their head throughout the meal, and tend to spend a bit more money as a result.

As a frugal customer, you need to be aware of this marketing ploy that many restaurants present to their customers and not fall into it. Be aware that the price is not less than you think it is, but simply looks to be less because of the lack of a currency sign. Once you add the prices up in your head regardless, you need to realize that you are still spending the same amount of money, and the price is not diminished. In this type of economy, the restaurant industry has thrived over menu upgrades such as this, although many customers are slowly learning this secret and are maneuvering ways around their psychological approach to eating.

What are your tips for being frugal at restaurants? Do you try to save as much money as possible? Or do you allow yourself to splurge on nice occasions? How often do you eat out?

This post was contributed by Tara Miller, who writes about the online teaching degree. She welcomes your feedback at TaraMillerr00 at yahoo.com