This article was originally published in UX Magazine on September 23, 2010.

Microsoft recently announced an upcoming price increase for the XBox Live Gold membership fee. When this news broke, a few retailers such as NewEgg responded by pushing their existing stock of gift cards (selling the membership at the older, lower price). It was fascinating to watch people scramble to get their hands on the remaining gift cards. Even people who hadn’t yet tried XBox Live purchased some of the gift cards, explaining, "they won’t be around for long—now’s the last chance to buy a year membership at the current price."

But why?

The simple answer is that people infer special value in something that has limited availability. This is true in dating, commerce, gaming and other fields. Everything from gold and diamonds to "limited edition" candy bars to baseball cards prove this point.

But what about web applications? In most cases, we’re not dealing with physical goods, but rather with digital content that be copied or throttled as needed with little to no costs. Where everything is digital and scarcity should be a quaint notion, does this same idea hold true? And can we use this to influence behaviors? Or get people to do more than just purchase something?

Using Scarcity in Commerce

The most obvious application of scarcity is in retail and e-commerce. A retailer may only have few shirts left in your size. A car dealership may only have one car on the lot with the features you want. Collectible items fetch a lot more money in aftermarket auctions. These same sales tactics apply to online shopping as well: A travel site shows "only three tickets left at this price," or an artist only has "six copies of this print remaining."

3 tickets left

Only 3 tickets left. Better buy them now!

This idea has also been used in domain name "land grabs." There is a very real scarcity of domain names on the Web. But custom URLs, such as stephen.somereallycoolnewsite.com can also leverage this scarcity to encourage signups.

Jango save your station

Can you spot what is scarce in this homepage?

But scarcity can be used for more than simply encouraging purchasing behaviors; because people value things that are scarce (the reason we feel pressured to purchase something), this same principle can be applied in other creative ways.

Using Scarcity to Increase Quality

Foodspotting is a site where people share photos of their favorite dishes. Rather than review a restaurant, you can see and share favorite dishes at a restaurant. You like the Pad Woon Sen at that Thai place? Let people know by taking a photo of the dish next time you eat there. Foodspotters, as Foodspotting users are called, love sharing these photos. In fact, before there was Foodspotting, there have been photo groups on Flickr where people shared interesting photos of dishes.

So how is Foodspotting using scarcity?

If you’re making the effort to photograph your dinner, you probably at least enjoy that dish. But what about your favorite dishes—the ones you rave about to your friends? For these, all users get "noms"—special ribbons reserved for those dishes you’ve tried and loved best. But there’s a catch: Foodspotting states, &ldsquo;You only get 5 noms to start with and must earn the right to nom more foods after that!&rdsquo;

Foodspotting noms

“Noms” are reserved for my favorite dishes.

This idea could be applied in other, more familiar contexts. Imagine YouTube limiting each person to a handful of five-star ratings per month. Or what if Facebook limited the number of “likes” a user can use per day? While this isn’t the behavior Facebook wants to encourage, introducing a limited supply would change how people use the "like" button.

Like limits

Here’s another way designers are using scarcity to encourage quality:

Remember “show and tell” from elementary school? Dribbble is a new site where designers, developers, and other creative pros can share sneak peeks (or “shots”) of their current work. Just as Foodspotting encourages people to be selective about their noms, Dribbble encourages people to be selective about what they share by limiting how many shots users can share each month.

Dribbble’s founders don’t hide their use of scarcity to encourage high quality submissions:

Dribble shot

So far, the high quality of the submissions that have accumulated on Dribbble is impressive. This is partly attributable to the caliber of the designers who were among the first to contribute to the site, but also to conscious planning by the site founders. Through scarcity and other intentional design decisions, they hope that people will post with care and maintain the quality of images shared.

Read part 2 of the article.

Learn More on Scarcity and Seductive Interactions

Scarcity is just one technique we can use to take advantage of people’s desire for playfulness and their natural curiosity. Stephen is exploring several of these techniques in his upcoming online UIE Virtual Seminar, Leveraging Seductive Interaction Design on Thursday, November 4. We always find Stephen’s ideas to be inspirational and thought provoking, giving us new ways to put fun into our designs. You won’t want to miss Stephen’s seminar.

Share Your Thoughts with Us

Have you encountered designs that use scarcity? How about different ways to encourage users to act and participate? We’d love to see your examples. Share them with everyone on the UIE Brain Sparks blog.

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