Pain of Paying

By Ben Ambridge


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Picture the scene: It’s been a tough year at work but, finally, here you are on your summer holiday. You stretch out by the pool with a cocktail, feeling contentedly full from your delicious buffet lunch. Bliss. In the evening, you relax with a few more drinks before dancing the night away at the hotel disco. Exhausted but happy, you head off to bed…

…But on the way, you’re stopped by a staff member, who presents you with an itemised bill for the day. It’s all here: a day’s room rental, meals, drinks, room-cleaning fee, towel-hire charge, surcharge for wear and tear on the carpets. Oh, and your day’s bill must be paid here and now. In cash.

Would you go on a holiday with a company that charged like this? Of course you wouldn’t. You’d much rather pay all in one go at the end or, even better, up-front for an all-inclusive deal. Why?

Because of what Psychologist Dr. Ofer Zellermayer famously dubbed “the pain of paying”. You want to move this pain to some other point in time – after or before the holiday – not have the pain intruding on your enjoyment.

And this isn’t just a metaphor. There was recently a brain scanning study at the University of Toronto which found that, when participants paid with something in cash, the pain areas of the brain were activated – the same areas that were activated when they were given a painful electric shock.

What is very useful for eCommerce is that Zellermayer has conducted studies that look at exactly what factors can reduce the pain of paying. He started out with 12 possible factors and found out that actually these six are the most important.

  1. Fairness. If a payment is fair, it doesn’t seem as bad. So the pain of paying is going to be worst when it feels unfair. For example, if you’ve clicked right through what you think is the final price, then an extra handling or shipping charge is added on right at the last minute and you think it’s unfair, this is going to make paying really painful.
    We had a client where we identified that new customers seemed to think the delivery charges were unfair, particularly for the first order where they were potentially just trying out the product, so we did free delivery for the first order, and got a significant increase in orders.
  2. If a payment feels like an investment, it doesn’t seem as bad. We’ve probably all experienced this. Paying hundreds or even thousands of pounds for – say – a new computer really hurts. But if you tell yourself you need it for work, and it’s going to bring in money in the long run, it doesn’t feel nearly as bad.
  3. This is a bit of a surprising and counterintuitive one, but actually, an immediate payment feels less painful than a drawn-out one. This suggests that if you’re selling – say – an annual subscription, people will prefer to pay it all in one go, rather than sign up for a monthly direct debit. Notice how Amazon Prime does this – pushing people towards the annual rather than monthly payment.
  4. Again, this is the opposite to what you might expect, but paying an expense for another person feels LESS painful that paying for something for yourself; perhaps because it’s easier to justify to yourself – I’m just doing this to be nice. So, if you sell, for example, fancy wine – you might want to gear your site more towards those purchasing for others as a gift than for themselves.
  5. Control. This one is not surprising at all. People like to be in control of their payment. They want to click “Pay” and pay there and then; they don’t want –for example – direct debits whose amount can change from month to month without their say so.
  6. Paying before rather than after you get the product. Fortunately, this is how eCommerce almost always works anyway. But it’s one of the reasons why all-inclusive holidays have become more and more popular, rather than paying your hotel bill at the end of the trip.

And in fact, our findings bear this out. Whenever we’ve put one or more of these principles into practice on a client’s site, we’ve seen positive uplifts in both conversions and revenue. So, remember to follow these tips on your site, in order to minimise the pain of paying.

Ben Ambridge
Hi, I’m Ben. I’m a Reader in Psychology at the University of Liverpool and I lead consumer psychology at Endless Gain. I’m interested in how research findings from academic psychology can be applied in our everyday lives as consumers. And, importantly how psychology plays an influential role in ecommerce. I write a weekly psychology column for The Observer, and my book Psy-Q: You Know Your IQ - Now Test Your Psychological Intelligence has been translated into 15 languages. Check out my TED talk, "Ten Myths about Psychology, Debunked".

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