A small winery produces only 600 bottles of a special single-vineyard red each year. When it tells its mailing list that the vintage is limited and will sell out, it does, within a week, at a higher price than its regular wines.
Encouraged, the owner starts adding “limited stock” and “only a few left” to almost every product on the website, including wines it has plenty of. For a while, it seems to work. Then customers begin to notice the same “almost sold out” labels appearing month after month. A regular customer gently points out that the “last few bottles” of one wine have been on sale for a year. The labels stop working, and something worse happens: customers start to doubt the special vintage claims too.
Scarcity is one of the oldest and most reliable tools in promotion. Research shows why it works. The winery’s experience shows why it only works when it’s true.
One Like insight: Real scarcity makes things more desirable. Fake scarcity makes you less believable.
The cookie jar
In 1975, Stephen Worchel, Jerry Lee and Akanbi Adewole published a simple but influential experiment in the Journal of Personality and Social Psychology. Participants were asked to taste and rate chocolate-chip cookies taken from a jar. Some found the jar holding ten cookies. Others found the same jar holding just two.
The cookies were identical. Yet people rated the cookies from the nearly empty jar as more desirable and more valuable than those from the full jar. The effect was even stronger in another condition, where participants saw the jar change from ten cookies to two during the experiment. Cookies that had become scarce were valued most of all, particularly when participants were told the others had been taken because of high demand from other people.
Psychologists explain the effect in a few ways. Scarce things are often valuable, so we use scarcity as a quick signal of quality. Scarcity because others want something adds social proof. And losing the chance to have something feels worse than never having had the chance, which creates a sense of urgency.
The original study was small and used a single, low-stakes product, and later research has found that scarcity effects vary by situation. But the broad finding, that limited availability can increase perceived value, has been widely replicated and is familiar to anyone who has seen a queue for a limited release.
Honest scarcity versus fake urgency
The distinction matters more than ever. Customers have become familiar with countdown timers that reset, “only 2 left” messages that never change and “sale ends tonight” offers that return next week. Regulators in many countries increasingly treat false urgency as a misleading practice, and in South Africa the Consumer Protection Act prohibits misleading representations about goods and prices.
Honest scarcity, on the other hand, is a perfectly legitimate and effective way to promote. It might come from:
- Genuinely limited production. A small batch, a seasonal harvest, a handmade run.
- Real capacity limits. A course with twelve places, a photographer with four wedding dates left in December, a restaurant’s set menu for one weekend.
- Genuine time limits. A seasonal product, an early-booking price that really does end on a set date, a pop-up event.
The key is to explain why something is limited. “We only make 600 bottles because the vineyard is small” is believable and adds to the story. “Hurry, limited stock!” with no reason, on everything, quickly becomes noise.
As we explored in The Brand Premium, trust underpins a business’s ability to charge what it’s worth. Fake scarcity spends that trust for a short-term sale.
[Infographic placement] Same cookies, different value. Two identical jars. Left: ten cookies, labelled “Rated less desirable.” Right: two cookies, labelled “Rated more desirable.” Beneath, two columns. Honest scarcity: small batches, real capacity, genuine deadlines, explained reasons. Fake urgency: resetting timers, permanent “last few”, unexplained “hurry”. Caption: Worchel, Lee and Adewole (1975), Journal of Personality and Social Psychology.
Using scarcity well
Look at your business for genuine limits you’re not mentioning. Many small businesses have them naturally: limited appointment slots, seasonal products, small production runs, a maximum number of clients you can take on. Say so, clearly and with the reason. Then go through your website and promotions and remove any urgency claims that aren’t strictly true.
Use scarcity sparingly. If everything is limited, nothing is. Reserving it for genuinely special products or real deadlines keeps it meaningful.
A few questions can help:
- What is genuinely limited in our business: time, capacity, stock or season?
- Do we explain why something is limited?
- Are any of our urgency claims untrue or permanently displayed?
- Would customers who later learned the truth feel misled?
Which brings us back to the winery and its 600 bottles. The single-vineyard vintage sold out because its scarcity was real and explained by the size of the vineyard. The blanket “limited stock” labels undermined that credibility. By removing them and reserving scarcity messages for the wines that genuinely are limited, the winery could restore the trust that made its special releases sell out in the first place.
Sources
- Stephen Worchel, Jerry Lee and Akanbi Adewole, “Effects of supply and demand on ratings of object value”, Journal of Personality and Social Psychology 32(5), 1975.
