Strange Pricing

I recently bought a new vacuum cleaner. The price was £399-99 but there was a £200 discount for surrendering a used vacuum cleaner, so I paid only £199-99.

I've been puzzling about the economics of that transaction.

Is the nominal purchase price artificially inflated to persuade people who trade in that they are getting a bargain, or has someone discovered a lucrative use for old vacuum cleaners? I doubt the second. The discount was only a few pounds short of what I originally paid for the old cleaner.

I suppose that the great majority of purchases of cleaners are made by people replacing an old one, who would therefore be attracted by the large discount. On the other hand people buying their first cleaner might be annoyed at having to hunt for someone else's broken down cleaner to get a decent price for a new one.

Perhaps the secret is wedding presents. First buyers of cleaners will often be newly married couples who may have wedding present lists of overpriced household goods at some department store. Those who pay the artificially inflated price may be relatives buying wedding presents.

The moral is, don't give household goods as wedding presents. Write a cheque instead.