Consumer Spending Spendthrift Tightwad Scale Purchase Pain Threshold Scott Rick

Are you a spendthrift or a tightwad?

According to an expert in the theory of consumer shopping, these two descriptions can affect how much you spend on your shopping trips.  But these characteristics are significantly influenced by the idea of a “purchase pain” threshold. The level of purchase pain associated with buying an item predicts spending habits for the spendthrift, the tightwad and everyone in between.

Scott Rick, a marketing professor at the University of Michigan, is a student and lecturer of consumer spending and developed a “Spendthrift-Tightwad Scale” to assess shopping behavior.

What drives you to make a purchase is not whether you have an abundance of cash in the bank or find a deal that you simply cannot resist. According to Rick, spending is tied to the level of purchase pain experienced at the time of the sale. And the pain changes depending on how and why you make your purchase. For example, when purchasing with cash, the pain level increases. Spendthrifts, who normally are freer with their money, will tighten their fists around those dollars and spend less. On the other hand, if the purchase is made with a credit or debit card, the level of pain is dramatically reduced. You don’t feel the pain at the moment of purchase. That comes with your credit card statement a few weeks later. In these cases, both the spendthrift and tightwad tend to spend more on a purchase.

The purpose of the spending also affects shopping behavior. Both spendthrifts and tightwads spend about the same amount of money when buying gifts for others. This helps to explain the overnight waits in front of department stores and then the mad stampede when stores open on Black Friday. Most shoppers are buying gifts and using plastic. The two factors together mean bigger sales from a larger group of consumers.

Rick also found other factors influencing a shopper’s decision. Optional purchases are scrutinized by both spendthrifts and tightwads. However, purchases for loved ones are not considered optional, and both spending types will spend about the same amount of money for these items.

The spending category also affects purchase decisions. Spendthrifts tend to spend more money on items like coffee, entertainment and clothing – all purchases for self.  The tightwad is less likely to purchase these personal goods but will be more apt to spend if an item is considered an investment.

Contrary to what many shoppers may believe, buying is less concerned with good decision-making skills and more directly related to sensation. The Tightwad-Spendthrift Scale shows that if it feels good, you’ll buy it.

National Science Foundation (2010, November 26). Tightwads and spendthrifts: A Black Friday tradition. ScienceDaily. Retrieved November 26, 2010, from­ /releases/2010/11/101117184407.htm