How free is free? Make sure you're not paying more


Businesses from ballparks to bookstores are trying a new tactic to bring in customers: They're giving stuff away.

While giveaways can be good for business in terms of promotional buzz -- KFC got oodles of publicity for its Oprah-boosted grilled chicken giveaway, even though the promo itself was a train wreck of poor planning -- its bottom-line benefit is more nebulous.

The concept of freebies is a double-edged sword for businesses. On the plus side, customers usually think the free item is worth more than it actually is. It's a value perception: What's a better value than free? Nothing ... unless the sample or widget or whatever other token you're getting makes you overlook the prices of what you're actually paying for. Businesses like to make a big show of giving away goods or services that don't cost them very much in the first place, so don't be shy about reading between the lines of their "generous" offer. Also, any item you have to buy at the same time to get your freebie is likely to be at full price.