I don't have any evidence for this, but intuitively it feels like this must be true for much of the bell curve of humanity. In other words, it probably doesn't work very well for some sets of folks. It's very easy to look at $18.99 and mentally think "$20 once taxes hit," which ought to dispel the illusion. It makes me wonder if there are some market segments which intentionally avoid this sort of trick since it is either ineffective or offensive to their customers. Sort of like how Wal-Mart doesn't generally sell luxury products, but in reverse.
People spend more when prices end in .99 (2018)
71–80 of 210 posts
Re: People spend more when prices end in .99 (2018)
#72Earlier quoted context omitted.
Retailers don't do this because of published studies. They do it because they've tested it internally for the last 40 years.
I thought it's notorious that sometimes they also don't know what they're doing, being carried by trends and vibes. "Half the money I spend on advertising is wasted; the trouble is I don’t know which half"
The advertiser who knows half his spend is wasted is the one who /does/ know what he's doing.
Re: People spend more when prices end in .99 (2018)
#73Actually, the .99 price-point started as a clever way to prevent theft, manage inventory, and keep track of sales. The idea was that pricing something at $1.00 might tempt a cashier to pocket the bill, but pricing it at $0.99 meant they’d have to open the register to give change, reducing the risk. Back then, most registers didn’t print receipts. This method also helped with inventory control. For example, if the tot…
Both of those use cases seem like they'd only work if there were no sales tax to collect.
Sane countries (almost everywhere but the US), have sales-tax included in the consumer-listed prices.
Re: People spend more when prices end in .99 (2018)
#74I never like thinking of pricing in this way. When you price something as $9.99, you're signaling to your customer that you're trying to manipulate them. Whereas a flat $10 is honest. Integrity means a lot. The software I sell is priced in whole numbers. However, the magnitude of effect claimed in the article is huge. It's the difference between selling at cost and a huge margin. Between doing well and shutting down…
> Integrity means a lot. Does it? Has anyone priced out the premium integrity can command? As anecdotally, it doesn’t seem to matter unless you have a sterling reputation. People with merely a good integrity reputation are better off selling it off until they are low ish integrity. And if you compete on price, may as well abandon it entirely.
Agreed. And a sterling reputation may mean only good at hiding disintegrity.
Re: People spend more when prices end in .99 (2018)
#75Actually, the .99 price-point started as a clever way to prevent theft, manage inventory, and keep track of sales. The idea was that pricing something at $1.00 might tempt a cashier to pocket the bill, but pricing it at $0.99 meant they’d have to open the register to give change, reducing the risk. Back then, most registers didn’t print receipts. This method also helped with inventory control. For example, if the tot…
There's a lot underneath your comment. For instance, when you buy something and get a receipt - it is not for you the customer. It is to keep the employee honest. If there is no receipt, it might not have been entered into the cash register. Now with electronic payments a lot of this risk has gone away and receipts are becoming optional. Also, I remember some people telling me in their stores, the last digits of a pr…
Costco does that. If a price ends in .97, it's been discontinued. If a price ends in something that isn't a 9, usually means it's on sale. You can look up the exact details.
Re: People spend more when prices end in .99 (2018)
#76Actually, the .99 price-point started as a clever way to prevent theft, manage inventory, and keep track of sales. The idea was that pricing something at $1.00 might tempt a cashier to pocket the bill, but pricing it at $0.99 meant they’d have to open the register to give change, reducing the risk. Back then, most registers didn’t print receipts. This method also helped with inventory control. For example, if the tot…
> pricing it at $0.99 meant they’d have to open the register to give change, reducing the risk
How does opening register reduce risk?
Re: People spend more when prices end in .99 (2018)
#77Earlier quoted context omitted.
in china, businesses are required to use government managed software that will automatically handle taxes and print on government issued receipt paper. for a while the receipt paper included a scratch field where consumers could win something in order to motivate them to demand a receipt. at least once we won more than we spent. some 2digit amount in dollars.
The government-managed (or at least government-certified) software is not just China, but also large parts of the EU.
> government-managed (or at least government-certified
Huge difference.
Re: People spend more when prices end in .99 (2018)
#78Free business idea: VR glasses
that turn $x.99 price markings into $(x+1).00. The glasses cost $x.99.
Re: People spend more when prices end in .99 (2018)
#79[flagged]
Love to hear their explanation of how they are deceived.
Re: People spend more when prices end in .99 (2018)
#80> Stevens Power Law says that to double the perception of brightness, add 4 times more wattage.
Interesting fact, but I wished they wouldn't use the confusing formulation of "adding 4 times more" which sounds to me like a five-fold increase.