Ripple effect of 'Girl Math': Analyzing impact on consumer behavior, retail returns

Point of View

This article was originally published here in Retail Customer Experience.

Retailers are jumping on the girl math bandwagon in their marketing strategies, but they can also use it to shape their approach and messaging around product returns.

Art imitates life, and so those of us in the retail and business spaces should pay attention when an art or creativity trend becomes ubiquitous. Yes…I’m talking about paying attention to TikTok.

One of the latest TikTok trends is all sharing examples of “girl math” — a tongue-in-cheek term for a common psychological approach that people (not just females) use to justify spending: If I buy a $500 pair of shoes and wear them for three years, that’s “really” only about $14 a month. If I get money back on my tax return, that’s “free” money.” If I get a $100 gift card and spend $200, I’m “really” only spending $100.

Sound familiar? I know I’ve justified spending that way. But because I work with retailers on their returns management processes, I’ve been thinking about how girl math influences consumer decisions and especially their post-purchase behaviors.

Unraveling “Girl Math”

“Girl math” isn’t new in cognitive psychology. People of all ages and genders use it to explain their spending. In finance and science, this mode of thinking is called “mental accounting,” and it’s defined as a person using subjective criteria to assign different values to the same amount of money. And it’s not just consumers; the same article points out that seasoned investors often take a subjective view of their portfolio, which causes them to make irrational decisions. For instance, selling a high-performing stock instead of a losing stock based on the hope that they’ll make their money back eventually, even though selling the losing stock is more logical based on tax implications.

It should be noted that mental accounting, a.k.a. “girl math,” isn’t always a bad thing or a gendered way of thinking. We’ve all used it to justify our spending. As one woman told Buzz Feed, “It’s meant to be lighthearted. If buying a new dress, you feel good in brings you joy — do it!… Girl math reframes the narrative and takes away the shame around spending money. Girl math also isn’t gender specific — if it resonates, it’s for you!”

“Girl Math” and purchasing behavior

The reason for humans’ mental accounting, according to the work of Richard Taler as cited in this article, is that people think of money differently depending on its origin and intended use. In other words, we think of money in relative terms, not absolute terms.

This idea of money having relative value plays a big role in how we, as consumers, shop and how retailers market to us. Take the declaration, “This deal is too good to pass up!” It gives us the feeling that we’d be losing money if we didn’t take advantage of a great deal. The allure sets the stage for impulse buying and the feeling that we got a steal. (Girl Math would agree, saying if you don’t shop a sale, you’re losing money.)

The focus on girl math also lessens the stigma of purchases that we personally find valuable or just plain fun. Online or brick-and-mortar retailers could see increased spending on small purchases (girl math point of view: Anything less than $5 is essentially free) or increased use of cash (no paper trail = not “really” spending money).

The return paradigm

Retailers are jumping on the girl math bandwagon in their marketing strategies, but they can also use it to shape their approach and messaging around product returns.

For example, do shoppers feel like they got a $25 discount if they return a $50 item and exchange it for a different item that’s $75? (answer: yes, many do). A retailer could consider offering a store credit instead of a refund, which may seem like free money to the consumer and prompt them to spend more on their next visit.

Better yet, retailers can use girl math to build brand loyalty while reducing returns that cost them money and have a big environmental impact on the planet.

Post-purchase reflection

On the surface, girl math is about getting a deal. Go a bit deeper, and it’s really about getting value.

A return is the contrary; it’s triggered when a consumer doesn’t find value in the product. Maybe the product wasn’t what the buyer expected, or they simply changed their mind. To reach consumers who are waffling on whether to make a return, a retailer’s post-purchase engagement is influential: Product tips-and-tricks, stories that spotlight happy users of the product create a feeling of community or even a thank you email can all make the consumer feel their money was well spent.

Retailer return policies, economic implications

One of the tenets of girl math behavior is that making a return is like making money. That isn’t helpful for retailers, who then have to spend money managing and attempting to resell an item: Research has found the cost of managing a return is about 17% of the prime cost, while others estimate the cost of an e-commerce return to be as high as 30% of the purchase price.

Here are two girl-math approaches to head off potentially avoidable returns:

Emphasize exchanges over returns: Perhaps a product return comes with a restocking fee, but an exchange doesn’t. The consumer feels like they’re getting more value from an exchange while you’re driving another sale and recouping more of the item’s cost.

Communicate the sustainability impact: Returns have well-documented impacts on the environment and climate change — two things younger generations especially care about. Explain the environmental impact of a product return on your shopping cart page and in your online returns portal to hopefully give the customer pause if they are over-buying with the intent to return most items.

Even if the customer decides to make a return, educate them on how to make the return more sustainable to keep costs and environmental impacts down. They could be asked to take a return to a store versus mailing it back to save on packaging waste and truck emissions.

Scrutinizing small to medium enterprises

Industry watchers have pointed out that girl math is another form of “treat” culture that promotes small purchases as a form of self-care (think of all the ads that proclaim, “Treat yourself!”). SMEs can use this marketing message for small purchases or impulse buys to drive sales.

Because girl math is ultimately about value, SMEs have a huge advantage over big retailers. Spending at a locally owned business supports local employees and families. Communicate that to your customers to emphasize the value and impact they can have with their spending: “Spending $100 in this store is a $100 investment in your community.”

Shaping future retail strategies

We’ll likely see retailers continuing to capitalize on this trend in their marketing, whether it’s highlighting value and well-being or even installment plans that make big purchases more digestible.

There’s a negative side to girl math, which could drive increased returns and exchanges that burden retailers and the environment with extra packaging, garbage, and emissions. Companies would be well advised to stay ahead of that and communicate how buying trends have very long-term impacts.