What Is Price Anchoring? Why the First Price Sticks

Quick Definition

Price anchoring is a pricing tactic where the first price a shopper sees becomes the yardstick for judging every price after it. The anchor might be a crossed-out “was” price, a premium version shown first, or a bundle’s full value. The product costs the same either way. Shoppers just feel differently about whether the price is fair.

How a Price Anchor Shapes What Feels Fair

Most shoppers have no idea what a product should cost, so they compare it to the closest number they can see. That number is the anchor.

If you’ve just seen $120, an $80 price looks reasonable. If you saw $50 first, that same $80 feels steep. Nothing about the product changed, only the number you compared it to.

In an online store it usually shows up in one of three ways:

A “was” price. A crossed-out $70 next to a $49 price.
A premium option. A $110 leather wallet shown beside the $60 one.
A bundle’s full value. “$95 if bought one by one, $69 as a set.”

Shopify’s Built-In Anchor Is the Compare-at Price

On Shopify, the anchor you’ll run into most is the compare-at price. Every product and variant has two fields, Price and Compare-at price. If the compare-at price is higher, most themes show it crossed out next to the real price, and many add a “Sale” badge too.

Your layout can set an anchor as well, like the first product in a collection or the variant a product page opens on. A bundle’s “bought separately” price works the same way. Any of them can end up being the first number a shopper sees.

Want to know how crossed-out prices change what shoppers believe? Read our guide to price anchoring with strike-through prices. Whether a cut looks better in percent or in dollars is another question, and the Rule of 100 for showing discounts covers it.

Anchor or Discount? Run the Wallet Numbers

Say a leather goods store sells a wallet for $60. It costs $24 to make, so every sale brings in $36 of gross profit.

Cut the price 20%. Now the wallet sells for $48 and profit falls to $24 a sale.
Add an anchor. Put a real $110 full-grain wallet right next to it. The $60 wallet keeps its price, and you keep the $36.

Going the anchor route keeps $12 more per sale ($36 vs. $24). The anchor route still wins as long as the $60 wallet sells at least two-thirds as many as it would at $48. Nobody can promise you it will.

You won’t know until you try both on your own traffic. That’s what price testing is for.

When Price Anchoring Backfires

The “was” price is made up. Shoppers can check other stores in seconds, and some browser tools show price history. A fake anchor costs you trust, and it can break the law too. Consumer rules in both the US and the EU limit fake “was” prices. In the EU, for example, the rules generally want it to be the lowest price from the 30 days before the sale.
Everything is always on sale. When every product has a crossed-out price all year long, people stop believing it. The anchor becomes background noise, a lot like discount fatigue.
Shoppers bring their own anchor. If a well-known product is sold in lots of stores, people already know the going price. Your crossed-out number is up against whatever they saw somewhere else.

Anchoring Doesn’t Need a Sale

A lot of store owners think price anchoring just means crossed-out sale prices. That’s only one version of it. A premium option or a bundle’s full value can anchor a price that never goes on sale at all.

It isn’t quite the decoy effect, either. A decoy is an extra option built to look like a worse deal, which makes the one beside it look better. An anchor just sets the first number a shopper judges from.