Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

People spend more when prices end in .99 (2018)

kenthendricks.com

Post reply on HN
Print view View original

111–120 of 210 posts

Re: People spend more when prices end in .99 (2018)

#111

Post by p0nce »

mcmoor wrote: post #29
tracerbulletx wrote: post #11

Earlier 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 "trend" was started in 1920. In the HN typical bourgeois stance, people here are of course immune to cheap tricks like .99 price ; and will reject it as "non-science", a very unscientific way to reject something on the basis of who makes the science.

Re: People spend more when prices end in .99 (2018)

#112

Post by gsuuon »

everdrive wrote: post #71

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 e…

I think it matters for the audience who's looking at that first number - so if $20 isn't a lot to you, you wouldn't care that it's $19. Comparable to a $1599 macbook pro. I think if there wasn't a positive effect on sales, large corps would've dropped it long ago.

Re: People spend more when prices end in .99 (2018)

#113

Post by mike_hock »

everdrive wrote: post #71

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 e…

> It's very easy to look at $18.99 and mentally think "$20 once taxes hit," which ought to dispel the illusion.

What illusion?

One possible explanation is that .99 prices are so well established that prices that don't end in 99 stand out, prompting a more conscious analysis by the customer. If round prices were the norm, it would work the other way. Similarly, if prices always ended in .01, those that didn't would stand out.

Re: People spend more when prices end in .99 (2018)

#114

Post by agumonkey »

tracerbulletx wrote: post #11
throwaway13337 wrote: post #9

I 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…

Retailers don't do this because of published studies. They do it because they've tested it internally for the last 40 years.

Reminds me of people who tried selling sturdy repairable phones with longer battery life. Even when people complained about battery issues etc. They kept buying the thinnest flagship. Mass markets are mass market.

Re: People spend more when prices end in .99 (2018)

#115

Post by HarHarVeryFunny »

__cayenne__ wrote: post #55
throwaway13337 wrote: post #9

I 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…

In 2012, JCPenney launched their "Fair and Square" pricing campaign, which included adopting whole number pricing. This campaign was considered a significant failure and is attributed with causing a 20% decrease in sales.

I'm sure this was mostly about people wanting to feel they got a bargain, and being programmed to shop for "50% off" sales.

It seems that perception of value is more important than actual price. In similar vein there have been many cases where sellers have increased sales of an item significantly by increasing the price to make it seem more valuable.

Of course both techniques can be combined.

Re: People spend more when prices end in .99 (2018)

#116

Post by agumonkey »

tlogan wrote: post #37
throwaway13337 wrote: post #9

I 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…

This is just psychology. Also everyone is doing this, and that’s a fact. If you do it differently, people will think there’s something wrong

I'm fascinated by these involuntary social protocols. Same as being too honest when everybody is spreading white lies. You end up being the bad one.

I wonder what field studies those.

Re: People spend more when prices end in .99 (2018)

#117

Post by simonbarker87 »

silverpepsi wrote: post #68
YVoyiatzis wrote: post #10

Actually, 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…

Was the $.99 price point really invented at a point in history before sales taxes came to be established? Round prices have never been convenient because it always come out to $1.07 1.08 1.09 something like that with a mix of state and local tax added

Plenty of places in the world (most/all of Europe at least) include tax in the .99 price. If I go to the check out to buy something that is priced at £9.99, I will pay £9.99 as the 20% is already accounted for.

Re: People spend more when prices end in .99 (2018)

#118

Post by kerkeslager »

AgentOrange1234 wrote: post #87
kerkeslager wrote: post #50

The kind of person who looks at this sort of thing and says, "Hey we should use this to manipulate people" is the kind of person our society needs less of. I'm sure Hacker News will have some earnest argument for why this form of competition is actually good for people.

I get where you are coming from. Books like Influence the art of persuasion and Thinking fast and slow wrestle a bit with the morality of studying this kind of stuff. It’s certainly possible to misuse the insights to manipulate others, but it’s also important to be able to recognize when and how you’re being manipulated.

I'm not criticizing the researchers--facts by themselves aren't moral or immoral.

It's the people who use this sort of pricing model that I'm critical of. It's sort of a moot point though, given this method of manipulation is so deeply embedded in our economy at this point.

Re: People spend more when prices end in .99 (2018)

#119

Post by samatman »

m463 wrote: post #56
YVoyiatzis wrote: post #10

Actually, 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…

Customer facing reasons for receipts in no particular order:

- Expensing purchases to their employer or self-owned business

- Record of sale to be used in returns

- Reconciliation of spending with cheques or credit card statements

- Budgeting and accounting generally

Re: People spend more when prices end in .99 (2018)

#120

Post by amelius »

subroutine wrote: post #42
tracerbulletx wrote: post #11

Earlier 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.

And many physicians still recommend putting ice on sprained ankles 5x per day to reduce the “harmful” swelling. Even though the abundance of research now shows icing delays the infiltration of proteins, hormones, and cells that aid in healing processes (and can even cause further tissue damage). Practices like this stick around because of the desire to be seen making proactive recommendations with putative benefit. W…

The human body (through evolution) only cares about long term effects for the human species.

The actual human might care about pain. Therefore, I don't think that the advice is necessarily bad.

Evolution isn't always our friend. There are many examples where our bodies work against us, only to help us evolve better as a species.

Post reply on HN