In the US gas prices at gas stations usually also show a tiny 9/10 of a cent in addition to the x.xx price, i.e. actual price is x.xx9 and I have never seen any other value for that 3rd decimal place
Except of course for Donny’s Discount Gas.
People spend more when prices end in .99 (2018)
121–130 of 210 posts
Re: People spend more when prices end in .99 (2018)
#122Actually, 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…
this feels apocryphal and appears to be one theory of many[1] (also - just take out an extra penny during the next transaction). to quote cecil adams "trying to find out who invented [psychological pricing] is like trying to find out who invented the hat."[2]
1 - https://en.wikipedia.org/wiki/Psychological_pricing
2 - https://www.straightdope.com/21341889/why-do-prices-end-in-9...
Re: People spend more when prices end in .99 (2018)
#123Earlier quoted context omitted.
Hard to control for this though. How did other department stores do in 2012? I doubt e.g. Sears were putting out great numbers.
The funny unique characteristic of the economic science is that it’s almost the only science without experiments. We can have a multitude of tests and get close to reality, but it’s impossible to reset the initial environment, control variables or test in isolation. You can’t reset people’s minds, so reproducing twice on the same island won’t give the same results, reproducing on two islands won’t either, and reprodu…
I don't disagree at all with any of what you have to say, but indexing returns to a "category" does go some way toward accounting for e.g. the overall decline of brick-and-mortar retail and malls.
Re: People spend more when prices end in .99 (2018)
#124In the US gas prices at gas stations usually also show a tiny 9/10 of a cent in addition to the x.xx price, i.e. actual price is x.xx9 and I have never seen any other value for that 3rd decimal place
That 1/10th of a cent savings might have looked good when gasoline was 39.9 cents but it's a constantly shrinking share of the cost of a gallon of gas that might psychologically be making the number look bigger as it is more digits. But since everyone does it, no one has an advantage or disadvantage because of it. Maybe when gas gets above $10/gallon gas stations will decide it's better to drop the 9/10th than to purchase new signage and pumps that can handle an additional digit.
Re: People spend more when prices end in .99 (2018)
#125Earlier quoted context omitted.
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…
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.
In Brazil we have an entire PKI based receipt system, every single purchase generates a full listing record straight to a government database sent in realtime (or later, in "contingency mode" as called, if having network issues). A lot sales also include the customer's personal tax-id... no privacy for any purchase at all. It's required for everything, even a liter of milk from the corner bakery.
This is also the electronic version of an older, paper based system, called Nota Fiscal (lit Fiscal Receipt) ... legally, every single item carried around the country must have one. Of course this was/is a major enabler for selective police action against "undesirable people" moving trivial stuff from a home to another, etc.
Re: People spend more when prices end in .99 (2018)
#126Earlier quoted context omitted.
The advertiser who knows half his spend is wasted is the one who /does/ know what he's doing.
Yes, that's the point of the quote, but the point of the poster you're replying to is that wasting half your budget would be considered gross incompetence in any other department. "Half the lines of code I write are useless, I just don't know which half." - an incompetent coder "Half the time I spend on the phone is wasted, I just don't know which half" - an incompetent salesperson "Half of my menu is inedible, I jus…
I don't know, you see plenty of people stating they only do X hours of real work in a given day. That sounds an awful lot like the same basic idea.
If I think about it too, half the lines of code being wasted is probably a relatively reasonable measure for writing code. Not because they're actually literally useless, but because you write a lot of scaffolding, a lot of first passes and a lot of code that will be a dead end or superseded before you're done. If you knew before you started exactly what lines of code you'd need to write, you'd be much more efficient, but we don't, so we write a lot of "waste" code too.
Re: People spend more when prices end in .99 (2018)
#127Earlier quoted context omitted.
> government-managed (or at least government-certified Huge difference.
to be fair, i don't know how much different the chinese management is from a european certification system. we were told to use specific software. and for sure that software is created by some company that may or may not be government owned. i don't know if there was any choice since, as is typical with foreigners, someone will just tell me their recommendation and not try to explain the differences between choices,…
I think the point is less ownership and more remote access.
Re: People spend more when prices end in .99 (2018)
#128[dead]
Re: People spend more when prices end in .99 (2018)
#129I 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…
I wonder if adding a bit of randomness to the lower-order digits would make pricing seem more deliberate than manipulative.
If a product in a store is $9.86, it suggests there’s a reason for the specificity. The same product at $9.99 feels like it’s priced at the maximum they can get away with.
Re: People spend more when prices end in .99 (2018)
#130Earlier quoted context omitted.
The advertiser who knows half his spend is wasted is the one who /does/ know what he's doing.
Yes, that's the point of the quote, but the point of the poster you're replying to is that wasting half your budget would be considered gross incompetence in any other department. "Half the lines of code I write are useless, I just don't know which half." - an incompetent coder "Half the time I spend on the phone is wasted, I just don't know which half" - an incompetent salesperson "Half of my menu is inedible, I jus…
> the point of the poster you're replying to is that wasting half your budget would be considered gross incompetence in any other department.
Not if there too a spend of X was required to get the value of X/2.