Thread: Pricing

Howdy gents,
I have a question about pricing.
Not "what" price, but why do sellers set prices that are 1 cent, or 5 cents or so below an even price..?
Example: $49.99 or $199.95 or $9.99... Etc.

Is there some sort of benefit they are receiving?
Is this some kind of Jedi mind trick to make me think that these are the droids I am looking for?

I feel like I'm missing something, maybe because I don't want to assume such tactics actually work..
I'm sorry if this is a dumb question, I'm a little blond sometimes.

It's wise you are. Old advertising trick it is. Think $49.99 is closer to $40.00 than $50.00,
then sucker you are.

U forgot the .9, Mike.

Look at gas prices. $2.89 .9 per gallon. What's with the other .1%. Maybe that's the money politicians keep from each dollar, but is under the radar, so to speak.

There is a reason for it, can't recall how it works, mom knew all that stuff. But I know what ya mean.

There's a show on the CBC called "Under the Influence" by a guy with decades of experience in the marketing/advertising business. Pretty good stuff. He did an episode on the psychology of pricing that you may find interesting. I couldn't find an individual link to that episode, but as long as this works outside Canada (ya never know...), the second link here should get you there:

https://itunes.apple.com/ca/album/un...-3/id893367393

In a local liquor store for me back in the States, everything is marked $6.99, $9.99 on up, etc. So let's say I buy a bottle of wine marked $9.99. I give the clerk a ten-dollar bill and he doesn't hand back a penny "as a courtesy" so as not to burden me with something that won't buy a thing. But this really bugs me and I always insist on the penny, saying, "If you're not going to give it back as a rule or 'as a courtesy,' then you should be pricing the bottle at ten dollars even and not $9.99!"

In France, I remember when the franc was the legal tender. Every price was flat, 10 francs, 100 francs, etc., and I really appreciated it. Then came the euro. At first, the prices were flat as before, 10 euros, 100 euros, etc., and to a certain extent they still are in comparison to the way prices are given in the States. But more and more, there is the 9,95, 99,99, etc. creep moving in. Wonder why that is, and why it coincides with a money system scaled more closely to the US dollar.

Originally Posted by Brontosaurus

In a local liquor store for me back in the States, everything is marked $6.99, $9.99 on up, etc. So let's say I buy a bottle of wine marked $9.99. I give the clerk a ten-dollar bill and he doesn't hand back a penny "as a courtesy" so as not to burden me with something that won't buy a thing. But this really bugs me and I always insist on the penny, saying, "If you're not going to give it back as a rule or 'as a courtesy,' then you should be pricing the bottle at ten dollars even and not $9.99!"

In France, I remember when the franc was the legal tender. Every price was flat, 10 francs, 100 francs, etc., and I really appreciated it. Then came the euro. At first, the prices were flat as before, 10 euros, 100 euros, etc., and to a certain extent they still are in comparison to the way prices are given in the States. But more and more, there is the 9,95, 99,99, etc. creep moving in. Wonder why that is, and why it coincides with a money system scaled more closely to the US dollar.

No pennies in Canada anymore. All prices round to the nearest 5¢

Originally Posted by DZEC

No pennies in Canada anymore. All prices round to the nearest 5¢

The amount we pay rounds to $0.05, but prices are still listed as $X.99, etc.

Originally Posted by DZEC

No pennies in Canada anymore. All prices round to the nearest 5¢

Only for cash purchases. Easy enough to profit . . . when total ends in a "3" or a "4", pay with plastic for exact payment. When it ends in a "1" or "2", pay cash.

Originally Posted by DZEC

No pennies in Canada anymore. All prices round to the nearest 5¢

That's too bad. But then, you all have $1 and $2 coins don't you? What a good idea.

Originally Posted by MikeT

Howdy gents,
I have a question about pricing.
Not "what" price, but why do sellers set prices that are 1 cent, or 5 cents or so below an even price..?
Example: $49.99 or $199.95 or $9.99... Etc.

Is there some sort of benefit they are receiving?
Is this some kind of Jedi mind trick to make me think that these are the droids I am looking for?

I feel like I'm missing something, maybe because I don't want to assume such tactics actually work..
I'm sorry if this is a dumb question, I'm a little blond sometimes.

They're also called, "smart" numbers.

For instance, an item that goes from .99 cents to .97 cents, triggers a inventory tag in the computer that categorizes the item as "clearance", any front line worker that see's .97 cents, knows it's now clearance.

In my time in retail I've seen dozens and dozen's of different configurations, .99 cents is one (they can be different for each retail industry or chain), .95 cents is another, I mentioned .97 cents. Then you'll see 87 cents, 56 cents, anytime you see a number like that it's usually "tagged" against an uploaded marketing program, with a start date and end date. Once the "sale" or "event" ends, the computer reverts to the old pricing model.

It's actually a pretty ingenious way of doing things, the front line people after about 6 months usually know all the numbers by heart, and can tell you what they mean.