“Anything To Save A Buck”: 97 Times People Felt Scammed By Companies (New Pics)

At its core, shrinkflation is a stealth tactic. It is most commonly seen in the food and beverage industries, though it can be spotted elsewhere, too. Investopedia stresses that companies rely on it to maintain or boost profit margins as production costs are rising.

Shrinkflation can sometimes go unnoticed because the reductions in size are minimal.

However, this tactic can backfire. Immensely!

Shrinkflation can massively harm brand loyalty, consumer trust, and the company’s reputation.

“Businesses risk consumer disappointment and losing customers if buyers notice the smaller packages and understand that they are getting less product but paying the same price that they paid for the larger amount,” Investopedia points out.

In a nutshell, when consumers spot concrete examples of products shrinking, they might feel like they’re receiving less value for the same (or bigger!) price.

One way that you can become more aware of potential shrinkflation at play is to pay attention to product packaging redesigns.

Check the net weight of the product or the number of units included in the packaging, and compare it to what you used to get before.

If you find that your favorite brand product has shrunk, you should remember that you always have alternatives. Vote with your wallet! Either refuse to buy the product or boycott the brand and buy the same thing made by another company.

Broadly speaking, businesses tend to see shrinkflation as a more viable alternative to raising prices. The former is more subtle. The latter is much more noticeable and likely to anger customers

“When raw materials or labor become more expensive, manufacturing costs rise. Consequently, this weighs on profit margins; the percentage of revenue remaining after all costs,” Investopedia explains.

“Management can either sit back and hope investors do not become too despondent, or seek to find other ways to recoup some of these losses. For companies lacking strong pricing power, reducing the weight, volume, or quantity of products sometimes represents the best option to maintain a healthy profit without jeopardizing sales volumes.”

Raising prices might force customers to choose another brand. Meanwhile, small reductions in size typically allow companies to stay profitable and competitive.