Impulse Buys Costing Aussies Thousands

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By Published On: May 22, 20240 Comments

Australian shoppers are splashing out on the little luxuries, but these impulse purchases can add up fast.

New research from Finder has found the average Australian spends up to $44 a week on impulse buys, totalling over $2.2k a year. 

Nationwide, $915 million is spent every week on impulse purchases, a yearly total of $47.5 billion.

Rebecca Pike, money expert at Finder, said impulsive spending can lead to financial harm.

“While it’s often associated with smaller purchases like sweet snacks and drinks, impulse buying can also be seen in big-ticket items like a last-minute holiday or designer gear.

“When times are tough, some people tend to ‘treat’ themselves more as a way to lift their spirits. But this habit can become a headache, especially if they are living beyond their means.”

Dubbed the “Lipstick Effect”, by economists, this trend sees consumers buying small luxury items during an economic downturn as a means to treat themselves to something that lets them forget their financial problems.

As cost of living increases, consumers tend to forgo big-ticket luxury goods purchases instead spend their (reduced) discretionary income on smaller luxury items from cosmetics, to simple luxuries like sweets. 

From strategically placed chocolate at the checkout to beauty products promoted by an influencer on social media, young Australians are the biggest culprits falling victim to spontaneous spends with gen Z spending $74 a week on impulse purchases, compared to just $9 by baby boomers. 

Only 33 percent of baby boomers make impulse purchases whereas 81 percent of gen Z are doing so regularly.

Interestingly, earlier research conducted by Finder in 2022 found that over 40 percent of Australians – equivalent to 8 million people – have made an impulse purchase of a product they’ve seen on social media, and 28 percent say they’ve later regretted it. 

Pike said becoming aware of your impulse purchasing tendencies can help save you money. Ruminating on a purchase for at least 24 hours, not relying on BNPL, and keeping track of your spending can make a huge difference. 

“Track your day-to-day spending habits at least for a few months to uncover impulse spending.

“Then create a budget for these purchases. Can you afford it without relying on debt? If not, you need to scale back.”

About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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