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Revenge Spending: the bad, worse, and ugly with case studies

The definition of revenge spending revolves around spending limitations imposed on us and their after-effects. We tend to go on a shopping spree after the limitations controlling our movements, spending patterns, and consumption intents improve.

While this is basic human behavior, before Covid-19 there wasn’t much discussion about revenge spending. It triggered the mass adaptation of this phenomenon worldwide in 2022.

According to McKinsey, In March 2022, spending by US customers increased by 18% compared to their spending levels from two years prior (before the pandemic). The trend, while stabilizing, hasn’t still died down yet and brands are still trying to fulfill the demands.

In this article, we’ll go through a few risks of revenge spending and discuss case studies associated with them.

The financial risks of revenge spending

Revenge spending helped thousands of businesses stand back up during and after the pandemic. However, the spenders, thanks to the period of deprivation, failed to manage their impulses and fell victim to financial adversities in the long run.

The financial risks of revenge spending are:


Manila, a single mother of two, was left isolated in her home during the pandemic. While she had restricted herself from going to stores and avoided panic buying, she, after her vaccination, couldn’t stop hoarding the shoes and candles she’s been eyeing. Only after a few months of revenge spending, she actively started making conscious decisions about not wasting money on things she didn’t need.

Revenge spending compels us to acquire commodities that we don’t necessarily need — making us overspend in the process. Most of the customers, who spent 18% more during March 2022, didn’t need the excess goods but committed their earnings to it anyway.

Reduced savings

Andrew, a 50-year-old male with a loving wife and own house, told us about his life during the pandemic. Andrew lost a significant amount of income during the pandemic. But they found solace in staying back and spending time together. All thanks to their adequate savings.

They spent quality time enjoying their hobbies and each other’s company, although they had to reduce their saving goals for the year.

After the pandemic started to ease, he got invited to a new opportunity and was hired as a consultant. As per him, they indulged in revenge spending during this time, going on costly vacations and a “Caribbean tour”. Which cost their savings and set them back multiple years in terms of future goals.

Debt and bankruptcy

Ethan (name changed), a tech enthusiast and an IT consultant with multiple credit cards, lost his job during the pandemic with most cards maxed out due to exorbitant spending.

His Amex card was also on steroids during this time. Failing to pay off the debts or even pay the rent to his apartment, he had to file for bankruptcy. The financial nihilism he put on himself pushed Ethan to lose his car, home, respect, and bank accounts.

Now, after a few months, he’s doing better in a new location and a new job. He has slowly started rebuilding his life and regaining control of his finances.

The psychological impact of revenge spending

A study during covid, conducted to determine the purchase behavior of emotional groups, was able to explore the psychological impacts of revenge spending to a great extent. This data-backed study focused on different buying motivations in the emotional groups, such as:

  • Mood alleviations

  • Shopping enjoyment

  • Socializing seeking

  • Self-control seeking

Note: the groups were diagnosed during the study and not before. Therefore, socio-economic anxiety, depression during the pandemic, and indifference due to the “we only live once” behavior, are part of the process.

Let’s discuss their correlation with different emotional states in easier words.

Anxiety Group

Among the anxiety group, mood alleviation affected the purchase intention of both bulk and high-priced goods. However, bulk good shopping intentions influenced the actual buying process more than the high-priced goods.

In easier words, individuals with anxiety were affected by the adversities of Covid-19 to the extent of buying bulk goods and hoarding them. They refrained from buying higher-priced goods but were interested in them regardless.

Shopping enjoyment motivation didn’t trigger revenge spending patterns in most anxious individuals. However, socialization-seeking motivation affected only the purchase of higher-priced goods. Furthermore, self-control seeking motivation didn’t affect any purchase patterns.

Anger Group

In the anger group, mood alleviation and shopping enjoyment didn’t contribute to the overall purchase patterns during Covid-19. However, socialization seeking motivations led to the development of high-priced goods purchase intention but not bulk purchases.

Self-control seeking motivations also affected the anger group. They intended for bulk goods shopping but not high-priced purchases.

Depression Group

Mood alleviation motivation, in depressed individuals, was responsible for high-priced revenge purchases but not bulk buys. However, shopping enjoyment didn’t affect the intent of both purchase patterns.

On the other hand, socialization seeking motivation triggered the intention to buy both high-priced and bulk goods. Self-control seeking, on the contrary, didn’t have any effect on purchase patterns.

Considering the symptoms of depression, which include reduced interest in life and guilt, the effects of the motivations are understandable.

Indifferent Group

The indifferent group is referred to as the cluster that wasn’t emotionally affected by the Covid-19 pandemic. They weren’t subjected to any major financial changes or health-related anxieties.

In them, mood alleviation and socialization seeking motivation affected the intention to buy both high-priced and bulk purchases. Socialization seeking motivation had a greater effect on the intent to purchase bulk goods than high-priced ones.

However, both shopping enjoyment and self-control motivations had no significant effect on purchase patterns.

The bottom line

Revenge spending contributed to both a stronger local economy and inflation. In this article, we’ve tried to give you an insight into the financial and psychological impacts of Covid-19 and revenge spending.

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