Case Study: Would You Be Better Off NOT Saving Money?

macy's store

I don’t normally do this (no, really… but…)

I signed up for a Macy’s credit card last time I was at the mall.

Opening department store credit cards isn’t a great long-term play for your credit — especially if you haven’t paid off all your debt yet…

But I had no consumer debt.

And good habits — like paying all bills, in full, were locked in place.

I was buying a sweet luggage set (you know, because I’m 27 years old now and apparently adults own rolly suitcases, not L.L. Bean hiking backpacks) and with the credit card + other offers, I saved $100 in 5 minutes.

Eat it, Geico.

I paid off the monthly statement then tucked the card away so I’d never use it. All my purchases are kept across the minimum number of cards, to maximize reward earning and to track my spending.

Since I’ve signed up, I’ve gotten bombarded with these offers…

Macy Promotion 1

Macy's Promotion 2

Macy's Promotion 3

Not too scammy right?

That first offer is pretty simple actually: spend $150 outside of Macy’s (“on gas, groceries, dining or bills”) and they’ll credit you $20 on your bill.

That’s $20 saved on money you’d spend anyway.

“Why not?” you might say, like Charlie the Unicorn, skipping towards Candy Mountain…

But we all remember what happened to Charlie:


They took his kidney!

Here are two ways in which you could lose a kidney:

(Macy’s (probably) won’t take your kidney. It’s a metaphor. Albeit, a bad one.)

How Macy’s Marketing Strategy Works

Why wouldn’t you want to save $20?

The part of me that loves cutting costs asks the same question.

“Why not, indeed?” he says.

(I always imagine this part of me wears a monocle and only drinks Bulleit bourbon.)

Tactically, saving $20 is great…

But another part of me, well…

Let’s say my Spidey-sense is going wild, if Spidey-sense was used to detect psychological traps and marketing schemes, not say, hurled cars or falling debris the size of tectonic plates.

Spidey-sense say: think strategically.

Macy’s marketing team is banking on you using this $20 credit. When you do, you’re registered in a specific “marketing funnel,” which leads to more mailings, more promotions, and more coupons.

“So what?” you might say. “If they send more, I’ll ignore them… You know, unless it’s a really, really good coupon…”


Here’s the thing:  Macy’s is one of the top 10 spenders of marketing dollars, each year – $762 million dollars to be (almost) exact.

Don’t you think they’ve found some success in their campaigns?

Because they use a TEAM of data analysts, web designers, graphic designers, psychology Ph.D’s, and copy writers, sitting in some wing of Macy’s corporate headquarters, eating foie gras and caviar*, whose ability to put food on their tables resides in their confidence to increase open rates (number of people who open their promotions/number sent) and conversion rates (number used/number opened or sent).

(*Note: don’t actually know if this is what they serve during lunch.) 

Macy’s Marketing Will Win the War of Attrition

Here’s the second reason a good tactical decision isn’t the same as a good strategic decision.

As Ramit Sethi likes to say, we are all cognitive misers.

There are only so many good decisions we’re able to make in a day.

Once we deplete that will power, it’s hard to make good choices.

Like… eating that healthy, balanced meal, instead of getting In N’ Out.

Or working out… instead of watching another episode of TRUE DETECTIVE (all I have to say is, Episode 4. Damn.)

Let’s say I use that $20 credit. I enter their marketing funnel, and start receiving more and more Macy’s coupons… all urging me to buy things I don’t need…

Those coupons will require using my Macy’s credit card.

You know, the one I originally told myself, “I’m only getting this for the discount on the luggage.”

Now if I use that card…

It’s an additional card I have to make sure I pay on time.

And I’m losing the simplicity of using a single card to earn rewards.

Meanwhile, at Macy’s headquarters, they’re churning out more promotions to customers using their Macy’s credit cards, as a means of “positive reinforcement…”

90 percent of which I’ll ignore… until I get one that’s “really, really good” I should use.

The tactical ways to save money (and network, and negotiate, and build good credit) are really important — but they have to fit into the larger strategy to pay dividends in the long run.

Photo Credit: Dr. Pavlov

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