It doesn't neccessarily mean someone is trying to rip you off!
It's a common phrase. Here's an example.
I had an old fridge. It was older than I was. My electric bill was usually around $100/month. Then I bought a new Energy Star fridge for $400. My electric bill dropped to $40 month because the new appliance used so much less energy than the old clunky one.
I spent $400 on the new fridge but I saved $60 a month in electric costs. Therefore, the new fridge paid for itself in under 7 months.
When people say "it will pay for itself", it means that there is an upfront investment of money to be made, but you will save money in the long run.