You’ve heard of shrinkflation, when brands make their products smaller, often undetectably so, and charge the same price. You may also have heard of skimpflation, when products remain the same size but are made with cheaper ingredients. Here’s a new one: spaving, a merging of “spending” and “saving” where consumers are enticed—you’re $9.37 away from free shipping!—to save more by spending more.
Like those other portmanteaus, it’s a strategy that many retailers are executing but which personal finance experts are cautioning consumers about.
Term on a dime: If it seems like the term came out of nowhere, it’s because it kind of did. Google searches for “spaving” were virtually nonexistent over the last five years, then spiked on the week of May 5–11, according to Google trends.
In the 30 days ending June 30, there were 693 mentions of “spaving” on social media, an astonishing 34,550% increase over the previous 30 days, when there were just two, according to Hootsuite data compiled exclusively for Retail Brew.
During that same period, the three posts about spaving that earned the most engagement all were on YouTube, with CNBC topping the list, followed by The Millionaire Morning Show with Anton Daniels (which posted about spaving twice), and The Ramsey Show, per Hootsuite.
While the coinage may be new, many practices spaving encompasses are as old as the—ka-ching!—cash register. Buy one, get one 50% off is spaving, as are the value-meal deals proliferating at restaurants including McDonald’s, Taco Bell, and Starbucks. Ditto for the Amazon Prime membership, where among other benefits, you’re spending more now to save on shipping later.
Melissa Minkow, director of retail strategy at digital solutions company CI&T told Retail Brew she was “excited when people started talking about” spaving because it helped explain something that had been a head-scratcher.
According to CI&T’s 2024 Connected Retail Survey, which is based on data collected in October 2023, 80% of consumers responded that the economy had changed their shopping habits, and among them, 70% agreed with the statement, “I am trying to spend less overall because of inflation, focusing primarily on the lowest cost items.”
But despite that penny-pinching sentiment, Minkow noted that in 2023, month-over-month retail sales grew, albeit slightly, in nine months of the year, according to US Census data cited by Investing.com.
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Spaving, Minkow explained, accounts for how consumers can “have this intense cost-conscious mindset” and yet still spend more. While anyone who’s owned a piggy bank knows that saving is usually considered the opposite of spending, in the spaving formulation, you must spend to save.
What’s the deal? Minkow called spaving the “new version of impulse shopping”—a twist on the age-old practice of tempting shoppers with end-caps and Twix bars in the checkout line.
“This version of impulse is creating deals that make people feel like even though they’re spending money, it’s being smart about it, it’s strategic, it’s a wise purchase,” Minkow said. “This is more like, ‘Hey, future you will thank yourself for saving money on this.’”
Spaving and other sales promotions are increasing among retailers, with March promotions up 15% YoY according to data analytics firm Numerator cited by CNBC.
Minkow noted that spaving offers are less problematic for retailers than shrinkflation practices, which often have consumer advocates, and even politicians, characterizing brands as mustache-twirling villains.
“Shrinkflation is the most obvious form of attempting to pull the wool over our eyes,” Minkow said. “You cannot tell me this cereal box is the same size as the cereal box that I purchased two months ago, and yet you’re charging me either the same or more.”
With spaving, on the other hand, “retailers can actually help consumers save money in ways that are compassionate,” Minkow said.
Rock a buy, baby: Many of the recent crop of articles on the practice have cautioned consumers.
“Buy two, get one half off? How ‘spaving’ discounts can derail your finances,” was how a June USA Today article framed it.
“You walk into Target, and you’re just there to buy dish soap,” Kris Yamano, partner at Crewe Advisors in Scottsdale, Arizona, told USA Today. “But then there’s a deal in the next aisle, and you’re walking out with a cart full of stuff you don’t need.”
While spaving and other sales promotions may help save on purchases, they don’t seem to be doing any favors for the nation’s savings accounts.
In May, the personal savings rate—defined as what percentage of their income Americans save—was 3.9%, down from 5.3% last May and the pre-pandemic rate of 7.3% in May 2019, according to Federal Reserve Bank data.