Proceed With Caution: 'Artificial Scarcity' Can Be Deceptive

Limited Offer StampAre you familiar with artificial scarcity? In broad marketing terms, it means deliberately limiting the availability of something to build demand. If you haven’t used or come in contact with this strategy in business, you’ve certainly experienced it as a consumer, whether you were aware of it or not.

Is this an approach you should be thinking about for your small business? It all depends. Consider some observations at from contributor Melissa Rayworth, who says there are plenty of examples of artificial scarcity all around us, pretty much all the time: McDonald’s use of McRibs exclusively as a short-term promotional item; limited-edition Gap jeans or art; and untold numbers of offers and pricing scenarios described as “Limited time only!”

In all of these cases, there are no real shortages. Instead, this is a marketing tactic to get our attention. And given that these kinds of scarcity claims, no matter how you cut it, are pretty much false, the real kicker, Rayworth says, is that they tend to work! Instead of feeling annoyed over being manipulated, consumers get excited and jump to buy! Which serves to perpetuate the practice. Regardless, social scientists say that at some level, we know that the scarcity of a given item isn’t really true—but we respond anyway. Go figure.

But not all scarcity-based selling tactics work equally well. Sometimes if claims are made tongue-in-cheek, buyers like being in on the joke and play along. Or, consumers may want to be part of something nostalgic or that they grew up with, like buying a “limited-availability” DVD of a classic film. Or maybe buyers want to splurge and feel like they need an excuse, even a flimsy one.

But blogger Ben Trafford says that as more and more consumers “wake up” to the reality of false scarcity claims, using such a tactic can backfire and alienate them in the process. And areas where artificial scarcity will no longer work include things distributed electronically, like e-books, music, and movies that everyone knows are unlimited.

So if we assume that the once fail-safe tactic of artificial scarcity may be losing some of its luster with savvy consumers and especially with younger generations of buyers, should you consider using it to drum up interest and sales? Definitely maybe, says a post on’s blog. In other words, there are right ways and wrong ways to use artificial scarcity (sometimes called “forced scarcity).

If you abuse the practice of artificial scarcity (and your customers in the process), you stand to lose way more than the business you were trying to gain. And things like trust and confidence and loyalty aren’t easily replaced, if at all. The authors say that while online marketing can be a venue for such abuses, your customers are also more likely to detect them there. When “limited availability” or “discounted pricing” claims, for example, are made but are obviously not true, you’re playing “fast and loose” with artificial scarcity, according to the authors.

On the other hand, the tactic is perfectly legitimate when you’re offering something of value to customers under honest and clearly stated terms, e.g., items are truly limited or prices are actually discounted. It’s important to describe what’s behind the scarcity offer—a closeout? A discontinued item? Know your buyers, too. Long-time customers, or at least those you know are interested, are more likely to respond to and not be turned off by this kind of marketing approach.
Image courtesy of Stuart Miles /

Have you ever used ‘artificial scarcity’ to increase interest and sales? Was it successful?

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