How Pricing Tricks You Into Ordering a Large Coffee

I almost always order the smallest coffee. Not because I’m trying to save money (for once), but because I simply don’t want a massive drink.

And yet, every single time I have the same internal debate "It’s only about 50p more… should I just get a large?”

The problem is I don’t want a bigger drink. I don’t want to spend more money. But my brain still tries to convince me otherwise.

That moment of hesitation? It’s not accidental. It’s designed.

The Power of Price Anchoring

Let’s look at a typical pricing structure:

• Tall = £3.50

• Grande = £4.25

• Venti = £4.75

  
  

The first number you see is £3.50 this becomes your mental benchmark. This is known as price anchoring.

Once that anchor is set, every other option feels relative to it. Suddenly, £4.25 doesn’t feel expensive, it feels like a small step up.

Why the Upgrade Feels So Easy

Notice how the price jumps work:

• +75p to go from small to medium

• +50p to go from medium to large

  
  

The increases get smaller as you move up. That’s intentional.

By the time you’re considering the large, your brain is thinking

“I’m already spending over £4… what’s another 50p?”

This is a classic behavioural pricing strategy, reducing the perceived pain of spending as the price increases.

The Role of Decoy Pricing

Here’s where it gets even more interesting. The smallest size often isn’t designed to be the most popular choice. It acts as a decoy. Its job is to make the medium and large look like better value.

• The small feels like poor value

• The medium feels like the “safe” choice

• The large starts to feel like a smart deal

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And just like that, you’re nudged toward spending more than you originally intended.

Perceived Value vs Actual Value

What many customers don’t realise is that the larger size doesn’t always mean significantly more coffee. Often, it’s just more milk or water, with a similar amount of espresso. So while the perceived value increases, the actual value may not change much at all.

Why Awareness Doesn’t Stop It

The most fascinating part is, even when you understand exactly what’s happening, it still works. I know the psychology behind it and I still have that internal debate every time.

That’s the power of behavioural design. Businesses don’t force customers to spend more. They simply create environments that nudge better (for them) decisions.

What Businesses Can Learn

This isn’t just about coffee, it’s a masterclass in pricing strategy.

• How are you anchoring your prices?

• Are your price steps encouraging upgrades?

• Do you have a “decoy” option that makes others more attractive?

• Are you shaping perception as much as reality?

Because often, customers don’t choose the best option. They choose the one that feels like the best value. So next time you’re standing in line debating whether to size up, just remember that the conversation in your head didn’t start with you... It started with the menu! Questions to consider:

1. Explain how price anchoring influences a customer’s decision when choosing between coffee sizes.

2. What strategies do businesses use to encourage customers to consider upgrading to a higher-priced option?

Extension: Design a simple 3-tier pricing model for a product or service of your choice that uses price anchoring and a decoy option. Explain how it would encourage customers to spend more.