Why the 0.99 cents?

[eliza61]

I know there is probably some deep psychological marketing reason behind this, but why do they put prices ending in 0.99C.

I was looking up the price of the dining plan for 2011 and the adult price was listed as 45.99. Come on, why not just call it $46 bucks and be done.

Things that make you say uhmmmm

 

[angierae]

I know there is probably some deep psychological marketing reason behind this, but why do they put prices ending in 0.99C.

You hit the nail on the head. People see the "45" and not the .99. If you think too much about it it doesn't work, but when you're just glancing at things you'll grab something that's 9.99 before you grab something at 10.05, even if it's only a six cents difference.

 

[njmom47]

It is absolutely psychological. I have worked for 2 different supermarket chains for over 30 yrs combined and it's the same in the supermarket (3/$5, makes you want to buy 3 even though you may only need 1).

 

[curseofcurves]

That way they can say something that is $9.99, is really "Under $10!!"

 

[FireDancer]

People see $9.99 and think under $10 or $4.99 and think under $5.

A lot of marketing is psychological. Buy one get one free works out better than 50% off most of the time because not only does the consumer perceive it as a better value but they end up spending 100% (on that first item) as opposed to only 50%. If that item is still sold at a profit the business actually makes out better giving away the second item.

If an item costs a store $10 and sells for $30. Selling one for $30 and giving away a second makes the company $10. If instead they give you 50% off only that first item they only make $5.

Now, think of some accessories and their hug markups. Printer cartridges are a great example. A $30 cartridge probably costs the company about $8 so giving one away free makes that company $14 while giving the customer 50% off that first one would cut that profit to $7.

 

[beansmom]

the 10 for $10 is a slick ploy...sometimes it's not even a sale price...regular price. Marketing is big business...takes a savvy consumer to outwit them.

 

[talulabelle]

There is another reason...

Although I know the practice stays around for the reasons listed above...which is to make people think they are spending under $10 rather than over $10 - I had heard that the practice originated because everything used to be cash and cashiers handling cash. Stores would list and item at $9.99 or $9.98 to ensure that their empoyees working the cash register would be forced to actually ring the sale and open the register drawer to deposit the money and give the customer change. If an item was $10 even. An employee could fake the transaction and just pocket the $10.00. Before security and inventory management were what they are today, this was the only way to ensure all transactions being rung. Actually, in some stores and with cash transactions, this reason still applies today.

 

[MaumeeMom]

Another reason is to make things ineligible for coupons.

I just had a $15 off $15 coupon from Cacique/Lane Bryant and all the sale stuff was $14.99. You had to spend $15 to use the coupon. I looked for something small to add to get to the $15 because I wanted a clearance top. The least expensive thing in the store was socks for $8.50 each. I wasn't going to pay an extra $8.49 for socks I didn't need so I ended up going the practical route, I put the top back and got unmentionables at full price, $15, for free.

 

[mrsbornkuntry]

This is an interesting thread, my 13yo was just asking me this the other day, I will have to share this with him after school.

 

[Duchie]

Along the same lines, I've always wondered why gas is priced at so much and 9/10th of a cent. Like on all of the signs the price is listed as "$2.59 9/10". Now why on earth do they do that? Why not just make it "$2.60"?

 

[Kies99]

Along the same lines, I've always wondered why gas is priced at so much and 9/10th of a cent. Like on all of the signs the price is listed as "$2.59 9/10". Now why on earth do they do that? Why not just make it "$2.60"?

This is truly a psychological marketing ploy. I saw a documentary that gave credit to one guy who owned a gas station something like 70 years ago. He set the price like this to compete against the other station in town. People ignored the 9/10 of a cent and focused on the whole cent, so he always had the lowest price in town.

 

[angierae]

I was always told the 9/10 of a cent was a special tax. Interesting.

 

[Cyrillo]

But guys you don't really need to buy 10 pieces for 10/$10 if you don't need 10 pieces. I usually just buy how much I need.

 

[Inigo]

I always heard it was Frank Woolworth, founder of the Woolworth's stores, who started the .99 practice to make sure his clerks had to open the register to get change.

Nowadays, I think it's a psychological thing. Of course, most of us say, Oh, it's $45, instead of saying it's $44.99.

 

[mistysue]

I have to add this:
I ran a salon for a while and set the prices myself. I would price a product $17.00. I even included tax. People would actually come in, get their hair done and drive to rite aid to buy it for $17.99 pre-tax because and I quote "if it's a flat dollar amount you are obviously jacking the price" (as told by a customer and paraphrased by another when I started asking people)

I raised my price to $17.99 and we actually started selling more.

Sometimes psychology makes us do stupid things. I couldn't stop laughing when I realized how many people went out of their way to go down the road and paid $2.50 MORE for the same items!

 

[quentina]

There is another reason...

Although I know the practice stays around for the reasons listed above...which is to make people think they are spending under $10 rather than over $10 - I had heard that the practice originated because everything used to be cash and cashiers handling cash. Stores would list and item at $9.99 or $9.98 to ensure that their empoyees working the cash register would be forced to actually ring the sale and open the register drawer to deposit the money and give the customer change. If an item was $10 even. An employee could fake the transaction and just pocket the $10.00. Before security and inventory management were what they are today, this was the only way to ensure all transactions being rung. Actually, in some stores and with cash transactions, this reason still applies today.

They still do this, now they ring it, void it and take cash. It sucks....I am so tired of arresting people for this.

 

[MaumeeMom]

But guys you don't really need to buy 10 pieces for 10/$10 if you don't need 10 pieces. I usually just buy how much I need.

It depends on the store. For example, there are some stores around here have a 2/$5.00 or pay the regular price, $2.79, for one. It really is annoying if I only want one.