Most of us purchase designer handbags because they have status. The quality of the bag is generally a secondary concern. Truth is, you can get a quality handbag at J.C. Penney for less than $100 — but that affordable bag doesn’t convey the same status as, say, the Yves Saint Laurent handbag spotted on Beyonce’s arm.
What is the designer handbag trap?
The designer handbag trap is the compulsion to overspend on a logo’d handbag because we think that bag will convey some positive message about who we are. We might tell ourselves we like the design or the quality, but if we’re being honest…the thing we like most is the label.
Writer Whizy Kim explores this idea in The surprising reason luxury goods are booming, published on Vox.
The psychology of why we buy designer products also eschews typical economic sense, because the motivation to buy is about status. The higher the price, the more status you’re theoretically buying.
Whizy Kim
Kim cites an interesting statistic: GlobalData reports that 27% of luxury goods buyers are American households with annual incomes of $50,000 or less. That income level does not align with luxury price tags, which means these are aspirational shoppers. They want the status and lifestyle the designer bag conveys, but they don’t have the funding to support it.
Exclusivity and high prices fuel demand
Luxury labels stoke the perceived status of their brands through exclusivity and high prices. One common trick is to create a limited edition product which is given away to celebs and A-listers. Images of the celeb carrying the product make their way to the social feeds, magazines, and gossip shows. And just like that, the brand is on everyone’s wish list.
The aspirational shopper’s chance of scoring an exclusive bag is roughly in line with the chance that Elvis will do a set at your next birthday party. That’s the point. Designers know you can’t get your hands on the $6,000 bag encrusted with moon dust and constructed from the skin of baby seals and the hopes of children. They’re setting you up to settle for the $800 mass-produced version — which is likely more profitable for the designer.
The price point that’s out of reach for most — or should be — is another exclusivity tactic. Economically speaking, there are always fewer people who will spend more on certain goods. Buy something expensive and you are automatically in an exclusive crowd, or so it seems.
Designer goods are wealth-depleting
The great conflict here is that spending unnecessarily on luxury goods limits your ability to achieve the wealthy lifestyle those goods represent. Any designer accessory or garment immediately and mathematically depletes your wealth. Prior to the purchase, you had $800 and now you have a bag that’s worth less than $800. Maybe if you leave the tags on, you could sell it for $700 on Poshmark. Even in that best-case scenario, you’re down $100.
The math gets worse if you charge the purchase and intend to take your time paying it off. In that case, you had $0 and you now have a debt of $800. And when the interest accrues each month, the cost of that bag rises.
The same dynamic exists for cheaper goods, of course, but the numbers are lower.
Avoiding the designer bag trap
If you are ready to swear off designer bags in favor of realizing longer-term wealth goals, try these strategies:
- Never buy the IT handbag. Wait until the season is over. If you still love the bag and can snag it at the outlet, go for it. Chances are, the bag will be less interesting after time has passed.
- Choose quality over status. This requires you to shop in person, which naturally will limit your impulse buys. Inspect the quality of the leather and stitching. Look for lining. Ensure embellishments are securely attached.
- Shop designer-inspired bags. Designer-inspired bags are not knock-offs. They are bags that may be similar in style to a designer bag, but they do not claim to be the real thing.
- Keep your purchases limited to classic styles. You can opt out of the trend mouse-wheel. Once you make that shift mentally, you’ll be less drawn to the styles of the moment.
- Save to a splurge fund. Try setting aside some money each month that you can spend on luxury goods. If you stick to that plan, you’ll learn to be very disciplined about when you splurge.
Bottom line
Luxury bags are heady, fun purchases, mostly because their makers are clever about nurturing perceived status. It’s perfectly fine to splurge on occasion, but do it on your terms with full knowledge of the trade-offs. If you need help cutting back on luxury bag buys, refocus on product quality and classic styles rather than what’s trending on the socials.