Payless ShoeSource pulled the ultimate stunt last month—and the results still rankle. 

The goal of the gimmick was to reclaim the bargain brand’s place in the world of affordable fashion, but the event’s wild success is a wakeup call for shoppers everywhere. 

How it went down 

For the experiment, marketing firm DCX rented a former Armani store and dressed it up to look like a designer-brand boutique. They chose the name Palessi, a blend of the word “Payless” and the Italian name “Alessi,” hoping the association would evoke feelings of a genuine designer brand. 

They filled the luxury store with cheap Payless shoes, swapping the tags for Palessi labels and marking up prices up to 1,800 percent. They reached out to 60 fashion influencers—celebrated trendsetters to whom shoppers look to for fashion cues—and offered them compensation for attending their designer brand’s launch party, held at an upscale mall. 

The fashionistas went wild over the cheap Payless shoes, paying up to $645 for shoes that normally retail between $19.99 and $39.99. 

At the end of the event, the company came clean—and shoppers were stunned. However, they did get their money back, and were allowed to keep the shoes. 

The social experiment succeeded in shifting consumers’ perception of the brand—and it serves as a sobering reminder of how easily we can be duped by designers. 

What we pay for 

Shoppers pay for their surroundings and for the packaging of products as much as they pay for the actual goods.  

As consumer behavior consultant Philip Graves says, consumers are not capable of determining the actual quality or value of goods. He explains: “The way that we evaluate things is through associations. If you put wine in a nice bottle, people like it more. If you package things up to look more premium, people will like it more.” 

In brief, branding is everything. 

Michael R. Solomon, a marketing professor at Saint Joseph’s University, writes that consumers automatically link the following factors with excellent quality:

• High prices
• Opulent venues
• Products from certain countries
  

It’s the snob appeal and the packaging that makes us believe a product is premium—not the product itself. 

How to beat the system 

If you fork over good money for labels, you may not be any better than the fashionistas who were tricked by Payless. 

Are you paying for the shopping experience? For the designer or foreign label? For the high prices? 

The Palessi experiment proves that you can buy clothing, shoes and accessories for 1,800 percent less than top brands that are virtually identical in style, quality and look. Of course, you won’t get the designer tag or trappings, but is it really worth paying hundreds of dollars extra just for a name and packaging? 

You work hard for your money—don’t waste it on a name.