The Rental Mindset
People get reckless when choosing a product they are considering renting, as opposed to owning, some new research suggests.
The study, from the University of Maryland’s Robert H. Smith School of Business, took a look at the ways in which consumer decision-making changes when the prospect is renting.
It is a hot topic, since there are so many options these days to rent things. Whether it’s “rent to own” or straight up renting, there are now ways to rent everything from furniture, vehicles and major appliances – right on down to designer handbags and accessories.
The study’s author Professor Anastasiya Pocheptsova, found that the care people take with purchasing is often absent when renting. This is due to the lack of long-term commitment — or irreversibility – that weighs upon the decision when purchasing something.
Pocheptsova said that the prospect of renting can make people less inhibited, even reckless. This can lead to people making bad decision, such as saying “yes” too often and taking on too many monthly payment obligations.
Creating a perception that there are no long-term consequences to accepting a sales pitch has always been a tool used by marketers. (Think about the number of times you’ve been offered products and services “with no obligation.”)
Making you believe that there’s a grace period breaks down the resistance you have to accepting an offer that you would otherwise have had second thoughts about. Of course, the seller is counting on you letting the return period lapse, or bonding with the product, before your sensible side kicks in.
“Easy credit” is another tool that marketers use to boost sales. It’s also another way that consumers get into trouble: a common mistake consumers make is to treat credit as “found money” since the spending does not immediately impact their ability to manage their expenses.
Of course, in the longer term, piling up debt can lead to unsustainable payment obligations.
So, now we have the “rental mindset” to contend with. The results of this study will only inspire marketers to find new and ingenious ways of creating a rental option for an eve widening range of products and services. They’ll be sure to write contracts in such a way as to maximize revenues – at the consumer’s expense.
If you’re given the option to rent something, take a moment to stop and remember this study. Like most people, you are probably susceptible to letting down your guard a bit when offered this option vs. purchasing something.
The best mindset to adopt is to treat renting as a money-sink – and to greatly limit the kinds of things you’re willing to rent. Housing and cars (short term) are fine, as well as things, (like, say, carpet steamers) that you need only occasionally and can rent for a day or so. But designer handbags? Just say “no.”
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