Let’s dive into how this clever pricing technique works and how you can apply it to your restaurant menu for maximum profit.

What Is the Decoy Effect in Menu Pricing?

The Decoy Effect is a pricing strategy rooted in behavioural economics. It introduces a third option (the “decoy”) to make one of the original two options more appealing by comparison.

Chef Abdul gives a practical example:

You offer two beverage sizes:

• Small Coffee – ₹150
• Large Coffee – ₹250

Most people may go for the cheaper option. Now, add a decoy:

• Medium Coffee – ₹240

The medium is priced so close to the large that the large now feels a far better value, encouraging more customers to choose it. The medium wasn’t meant to sell but to make the large more attractive.

Why the Decoy Effect Works

Human psychology heavily relies on comparison-based decision-making. Customers don’t always choose based on absolute value—they decide what seems like the best deal in context.

Restaurant consultants at RCPL use the decoy effect to help restaurants:

• Steer customers toward high-profit menu items
• Improve average ticket size
• Reduce indecision among diners

Chef Shajahan M Abdul says, “It’s not about offering more options—it’s about controlling the narrative of value.”

How to Apply the Decoy Effect to Your Menu

1. Start With a High-Margin Dish

Select a dish or item with strong profit margins—like pasta, biryani, cocktails, or smoothies. Now, create three versions:

• Basic version – Low price
• Medium version (the decoy) – Slightly cheaper than the premium
• Premium version – Slightly higher price than the decoy

Your premium version becomes the apparent choice, driven by perceived value rather than price alone.

Chef Abdul emphasizes, “The middle option isn’t supposed to sell. It’s there to make the highest-priced one irresistible.”

2. Use in Combos and Bundles

Combo meals are perfect for applying the decoy effect:

• Combo A: Sandwich + Fries – ₹199
• Combo B (Decoy): Sandwich + Fries + Small Drink – ₹279
• Combo C: Sandwich + Fries + Large Drink + Dessert – ₹299

Combo B exists to make Combo C look like an unbeatable deal.

Restro Consultants Pvt Ltd (RCPL) has seen restaurants boost combo upgrades by over 30% using this strategy.

3. Apply to Portion Sizes and Add-Ons

Whether it’s portion upgrades (regular, medium, extensive) or additional toppings (extra cheese, protein, sauces), strategically pricing the middle option will direct customers toward the larger, higher-value offer.

Chef Shajahan M Abdul recommends labeling these with descriptive terms like:

• Regular
• Decoy (e.g., “Classic”)
• Premium (e.g., “Chef’s Choice”)

Presentation matters just as much as pricing.

4. Design the Menu for Impact

Proper menu design helps the decoy effect work visually:

• Use boxes or highlights around the preferred (premium) item
• Position the decoy close to the premium
• Keep all prices on the same line for easy comparison

Chef Abdul says, “Design should guide the eye—and the decision.”

Real-World Examples from RCPL Clients

Coffee Chain:

• Small – ₹120
• Medium (Decoy) – ₹155
• Large – ₹160
  Result: Large became the best-seller within 10 days.

Pasta Bar:

• Classic Marinara – ₹280
• Cheese Burst (Decoy) – ₹370
• Signature Truffle – ₹390
  Result: Signature pasta outsold others by 40%.

Mocktail Bundles:

• 1 Mocktail – ₹180
• 2-Drink Pack (Decoy) – ₹320
• 3-Drink Pack – ₹340
  Result: Most customers opted for 3-drink packs.

Restro Consultants Pvt Ltd (RCPL) has rolled out similar pricing strategies across more than 70 outlets nationwide with consistent success.

Dos and Don’ts When Using the Decoy Effect

DO:

• Test the effect on high-volume items
• Monitor sales and tweak price points gradually
• Train staff to upsell based on value perception

DON’T:

• Overload the menu with too many decoys
• Use illogical or exaggerated price differences
• Confuse customers with inconsistent portion sizes

Restaurant consultants always stress the need for clarity and honesty in menu engineering.

Bonus Tip: Pair with Anchoring

Anchoring involves showing a high-priced option first so that all other items seem more affordable. Combine this with the decoy effect to influence perceived value even further.

As Chef Abdul shares, “Place a ₹1200 Chef’s Tasting Platter at the top. Suddenly, your ₹499 entrée feels affordable—and more guests will order it.”

Final Thoughts from Chef Shajahan M Abdul

The decoy effect is a powerful yet ethical way to influence customer decisions, improve average spending, and highlight your most profitable items without changing a single ingredient.

As Chef Shajahan M Abdul puts it:
“Smart pricing isn’t about manipulation. It’s about helping your guests make a great choice—and helping your business grow simultaneously.”

With the right strategy, presentation, and price positioning from experienced restaurant consultants at Restro Consultants Pvt Ltd (RCPL), your menu can sell more—intelligently and naturally.