Price anchoring is a cognitive shortcut merchants exploit: they present a high reference price first so the actual sale price appears obviously attractive in comparison. It's the classic 'was $199, now $119' presentation. Humans seldom evaluate prices in absolute terms; we interpret them relative to the first anchor we see. Anchors can be genuine (manufacturer's suggested retail price) or strategic (a made-up 'regular' price). The effect works because people assume the anchor is a meaningful baseline, even if it's irrelevant to the real market value. Recognizing anchoring helps you make more rational purchasing choices: instead of reacting to the 'was/now' framing, pause and ask whether you would buy at the anchor price, at the sale price, or if either price fits your real need. Check independent price-tracking sites or historical prices for the item to see whether the anchor reflects reality or is a marketing device.

Practical responses to anchoring: set personal thresholds (e.g., 'I won't pay more than $X for this category'), compare unit cost instead of headline price when applicable, and evaluate how often you'll use the product or service to judge true value. For subscriptions, compare per-month costs and the component services you actually need — a bundle discount anchored to a high combined price might still be poor value if you only use one feature. Also watch for fake anchors disguised in bundles, pre-checked add-ons, or limited-time 'struck-through' prices that reappear repeatedly. When shopping online, open a private browser tab and search historical price trackers; for in-store purchases, ask sales staff for price history or comparable items elsewhere. The key takeaway: anchoring is a relative trick — convert prices into a consistent personal metric (cost-per-use, monthly cost, or annualized total) and base your choice on that metric rather than the first number shown.