'Buy one, get one free' is a clever way to get you to spend more money

'Buy one, get one free' is often a clever way to get you to spend more money

One Burger King diner recently saw the price of her $2.16 sandwich rise to $3.19 per sandwich when she used a buy-one-get-one-free (or BOGO) coupon. Naturally, she became suspicious about how good a deal BOGO really is. This video explains why BOGO deals are a way for companies to get you to spend more money, rather than less.

All-you-can-eat buffets are a practical demonstration of economic ideas

Economists have noticed some restaurant goers prefer a flat pricing model despite it usually being more expensive than per-dish costs. The strategy behind endless servings includes concepts such as economy of scale, cross-subsidization, diminishing returns (of enjoyment of excess food), and more.

The legend of Pittsburgh’s fake Burger King

Years ago, a Burger King in Pittsburgh lost its franchise due to repeated customer complaints about food quality. However, the franchise-holders continued to operate the restaurant, switching to generic packaging but keeping the signage and uniforms. Customers eventually caught on and raised suspicions, leading to Burger King's corporate leaders' involvement. Learn more about the bizarre establishment and how it managed to continue operations for months.

CostCo's low-cost hot dogs: The strategy of 'loss leaders'

Wholesale food distributors like Sam's Club, BJ's, and CostCo place a premium on cutting costs for their consumers to cultivate brand loyalty. Enter CostCo's enduring $1.50 hot dog and soda combo. It's a classic example of a so-called "loss leader," a product a company loses money on but which keeps customers coming back for more. Learn the history of wholesalers and how selling over 200 million hot dogs in a year builds CostCo's brand.

The economics of all-you-can-eat buffets

Is it possible to out-eat the price you pay for a buffet? How do these places make money? We looked at the dollars and cents behind the meat and potatoes.

Expanding supermarket chains began offering coupons to attract customers in the 1940s

This was partially a customer acquisition strategy devised to lure customers into chains and away from their local independent grocers.

Regular coupon users pay less attention to the actual price of what they’re buying

The psychology of coupon users can feel counterintuitive: Research suggests regular coupon users actually prioritize coupon availability over actual price comparisons.

BNPL companies typically make money via merchant fees rather than interest

When a merchant partners with a buy now, pay later app, consumers are more likely to spend more money with that merchant—meaning that the merchant is willing to pay a small fee in exchange for the ability for customers to pay with buy now, pay later.

Digital coupon platform Groupon IPO'd in 2011 at a $17.8B market cap, but as of 2024 was worth just $103M—a 99.4% decrease.

Bed Bath and Beyond’s 20% off coupon had a cult following

The home goods store’s most fervent fans loved these coupons so much that some bought them in batches on eBay. The FBI even reportedly found one of these big blue coupons in famous mobster Whitey Bulger’s junk drawer. (Some users may experience a paywall.)

Dollar stores often place staple items at the back of the store so customers encounter other less-necessary items on their way there, leading to impulse buys.

With Americans increasingly concerned about high grocery prices, experts suggest meal planning and using apps like TooGoodToGo to keep household food costs down.

Soda is one of the most overpriced items at restaurants

All restaurant food is marked up—that's how they turn profits, after all—but soda is one of the most egregious. Fountain soda is remarkably cheap, with restaurants often paying a few cents for each glass before selling it for a few dollars. Food publication The Takeout estimates that the typical markup is around 1,000%.

Ray Kroc proposed the idea of franchising McDonald's as a way to sell more of his Multimixers 7 years before buying the McDonald's brothers out of the company for $2.7M.

Fast-food prices have increased more over the past 10 years than both full-service restaurants and inflation.

Stock buybacks are when a company purchases some of its own shares of stock

This reduces the number of shares on the market and, therefore, makes the remaining shares more valuable. Buybacks have received a lot of criticism in recent years for many reasons, such as how they could artificially inflate share prices.

Gap and Sephora now accept BNPL, despite paying up to 8% per sale

Despite these merchants paying roughly 2% to 8% of each sale's cost (more than they pay for most credit card processing fees), they're signing on, in part, because BNPL can help them improve their conversion rates at checkout.

Some ads help create ‘symbolic value’ for products

A Rolex watch and a watch from the Dollar Store serve the same purpose: helping the wearer tell the time. But a Rolex is worth thousands of dollars while the Dollar Store watch is costs $1 because of symbolic value, or what the watch says about its wearer. This article helps break down the difference between the two.

Is Domino’s pizza inflation-proof?

A Big Mac Extra Value Meal is nearly $11 in 2025, compared to $4.59 in 1993. A Taco Bell crunchy taco costs $1.79 today, but was only 59 cents in 1990. Inflation impacts the price of many fast-food items—but the price of a Domino's pizza hasn't changed much at all in the past two decades.

62% of online shoppers search for coupons or discount codes before making a purchase

Capital One estimates that 169.2 million Americans redeemed digital coupons in 2025. The bank compiled many different coupon statistics on how both shoppers and businesses used coupons last year, most of which reveal the increasing dominance of digital coupons over physical ones.

Raising the price of a Peloton bike increased the company's early sales—and that's part of why the bikes are so expensive

The original Peloton stationary bikes sold for about $1.2K, but Peloton founder John Foley said that price point made consumers skeptical of the product's quality. After increasing the price of a bike to $2K, Foley said people started to believe it was a quality product, and sales soon increased.

The Paypal-owned Honey app and RetailMeNot are popular places consumers find digital coupons today

With digital coupons overtaking physical ones as the most commonly redeemed coupons, customers flock to these sites and apps for coupons and discount codes, often checking multiple of them before making an online purchase.

Are burritos sandwiches?

In this video, we trace the burrito's origins, explore the legal and culinary battles around its classification, and break down why this seemingly simple food raises such a complicated question.

How fee-free Robinhood makes money

Robinhood is both loved and hated by retail investors. Although its mobile app is easy to use and transactions on its platform are fee-free, many individuals have taken issue with a controversial practice that drives 75% of its revenues. Robinhood uses payment for order flow, essentially taking payment from other brokerages to redirect users’ trades. Read up on how PFOF works here.

Meet the man whose 100-patty In-N-Out order permanently changed their menu

In 2004, Will Young and a group of friends, including Zappos CEO Tony Hsieh, talked an In-N-Out in Las Vegas into making a 100-patty burger. The stunt prompted the chain to cap orders at 4 patties, a policy that remains in place today.

Many investment bankers work on IPOs

When a company undertakes an IPO, investment banks often buy many of the organization’s shares directly from the company, in order to sell the shares on the stock market. The bank stands to profit after marking up the shares.

Explaining the 'Costco effect'

The "Costco effect" is a term used to describe how the warehouse chain has perfected the art of the impulse purchase. The strategic layout of the store and product placement encourage shoppers to explore and make impulse purchases after initially getting reeled in by low prices on high-quality goods. Read first-hand accounts from shoppers explaining the spell-like effect in this story.

The 'dupe' economy is fueled by the youthful thrill of thrift

Historically, you don't want people to know you have a knock-off luxury item. But today's younger generations are embracing the "dupe" economy, an open celebration of luxury knock-off items where consumers are proud to pay less for something roughly equivalent to premium brand offerings.

In 2023 and the first half of 2024, Berkshire Hathaway bought back more than $12B of its own stock

In the second half of 2024, the company—and Buffett—decided to buy up shares of Domino’s Pizza, Pool, Sirius XM Holdings, and Liberty Media. They also decided to sell Capital One, Ulta Beauty, and Nu Holdings, among others. Learn why Buffett is buying and selling these stocks and what it could mean for the financial conglomerate.

Experts argue some frugal habits—like driving farther for cheaper gas—aren't worth it

Other frugal habits experts suggest might not be worth the squeeze include driving to multiple stores in one trip to hunt for deals, as well as buying everything in bulk.

In 2024, the period between Thanksgiving and Cyber Monday saw 197 million shoppers

Some argue Black Friday has gone from one day of the year, to two days of the year, including Cyber Monday sales, to, more recently, an entire week. In recent years, companies have offered steep discounts for a week at a time rather than just one or two days.

Where to buy organic on a budget

In the past year, prices for organic fruits and vegetables rose 13.1%, significantly higher than the price increase of non-organic foods. While buying organic can be costly, certain stores can help organic shoppers save. This list highlights produce stores you may have been overlooking, like Trader Joe's and Walmart. Peruse the list and keep you grocery costs down.

From flowers to venues, seemingly everything gets a price markup when it's for a wedding

At the start of this video, a venue gives two people drastically different prices for what seems like essentially the same service: a family gathering and a wedding. These price differentials feel so ubiquitous across the wedding industry—and experts attribute this to quality of services for weddings versus other, more casual events. Learn more by watching this video.

Private equity firms often use leveraged buyouts to acquire new companies

In a leveraged buyout or "LBO," private equity funds finance acquisitions with debt secured by the target company's assets and cash flows. The PE firm aims to improve operations and leverage the company's profile to pay down debt, thereby increasing equity value.

Watch Selena Gomez explain collateralized debt obligations in a clip from 'The Big Short.'

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GMOs sound scary, but you eat them every day

Why are GMOs bad? They aren't. We've been eating them for decades with no ill effects, which makes sense, because a genetically modified organism is simply an organism, like every other organism, produces hundreds of thousands of proteins, but one or two of them are proteins that were chosen specifically by humans. Watch this 11-minute video for more.

A 'bilateral monopoly' occurs when there's one supplier and one buyer in a market

Bilateral monopolies are often used to conceptualize labor markets in small towns. Using this concept, large employers have a monopoly over the labor market, while workers have a monopsony as the only available laborers.

The business model for many dating apps is paradoxical

While these apps are designed to help people create romantic relationships, dating apps lose money when people find a monogamous relationship and stop using the app as a result. Some call it the dating app paradox.

Warren Buffett plays about 12 hours of bridge a week with Bill Gates

Known for being one of the most frugal billionaires alive, Buffett never spends more than $3.17 on breakfast (opting for either McDonald’s or Oreos). He also has New York Times front pages detailing horrible days on Wall Street hanging on his walls.

What exactly is college for?

The rising cost of college has many of us wondering, what exactly is a college education for, anyways? This "Freakonomics" podcast episode breaks down how colleges operate like large businesses and try to differentiate their products from one another to win market share. To find out what the overwhelming higher education system is doing wrong (and what it gets right), listen here.

In the 1960s, eateries started using discounted drinks (and sometimes food) as a marketing tactic to make money during off-peak hours

Today, we know happy hours as a time where bars and restaurants offer discounted alcoholic beverages (and sometimes even food or non-alcoholic drinks) in order to attract customers during off-peak hours. But originally, the term “happy hour” didn’t involve alcohol at all.

American CEOs are so wealthy in part because of stock buybacks, the process of a company purchasing shares of its own stock.

Market concentration and high markups don't always signal a monopoly

When regulators and economists evaluate whether a company constitutes an illegal monopoly, they often consider its overall market share or its relatively high price markups. This piece argues that the Olley-Pakes decomposition is a better measure, identifying whether customers within a market are switching to more productive companies.

What is buy now, pay later?

The buy now, pay later industry allows consumers to buy something immediately and pay in installments, typically without the need for applications or credit scores associated with credit cards. BNPL has boomed in the last decade, led by fintech companies Affirm, Klarna, and Afterpay, which have targeted young adults. Some critics say BNPL is a reinvented version of payday loans that allow borrowers easy access to cash with relatively few barriers.

Listen to a podcast episode about why college sticker prices are often misleading.

Ride along on one coffee company's journey through the stock market to better understand how a company goes from private to public.

Americans spend an average of nearly $500 per year on tipping at restaurants and bars

The habit runs contrary to economic rationality: Why pay more for a good or service you have already received when it isn’t mandatory? Researchers found that people tip, in part, to avoid the psychological pain of not fitting in.

Buy now, pay later loans typically split payments into 4 installments

While they're marketed as "interest-free" loans, BNPL loans often have penalties for late payments, such as late fees in varying amounts depending on the BNPL company used to make the purchase. BNPL users often pay 25% of the BNPL loan at checkout, and then pay the remaining balance in three more installments over the course of roughly six weeks, depending on the BNPL company and agreement.

Dating apps adopted 'freemium' business models as the market became more saturated

As dating app user growth slowed and companies like Tinder saw increased competition from upstarts like Bumble and Hinge, the industry has pushed for subscription tier adoption due to pressure from investors for predictable profits and more.

Some people are against Black Friday, saying it promotes consumerism

This comprehensive podcast video episode from NYU Professor Scott Galloway offers a deep dive into the economics of Black Friday, Galloway believes Black Friday allows corporations to exploit the worst parts of Americans’ consumerist impulses, and warns Americans should not believe purchasing things leads to greater happiness.