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

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

#51

Post by icedchai »

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…

I'm skeptical about the theft aspect. Couldn't a dishonest cashier just keep some pennies on-hand and pocket the bill anyway?

How is it useful is any of this today? Everyone uses point-of-sale systems and credit cards.

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

#52

Post by pluc »

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…

I'm doing that these days at the grocery store. If your shit ends in an odd number, I'm assuming it's been shrinkflated. OJ bottle of 1.87 liter? Pass.

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

#53

Post by galdosdi »

pluc wrote: post #52
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…

I'm doing that these days at the grocery store. If your shit ends in an odd number, I'm assuming it's been shrinkflated. OJ bottle of 1.87 liter? Pass.

What?

Why don't you just look at unit prices instead? That's the only price I ever look at and other than edge cases like trying new things or goods that you can't use up fast enough, there's no reason to look at anything else.

If your store doesn't have them, that's a sign you're at the wrong store and everything is overpriced.

Teach your kids this

PS: Walmart, which has pretty good prices, is famous for odd prices everywhere, so your heuristic would fail. All in all, really, a heuristic like this is a pretty weak way to try to be frugal and I can't recommend it. Just check the unit prices and shop at Aldi. Buy commodity ingredients, not trademarked factory food products. You can't help but spend a fraction of what other folks do when you just buy commodities by the unit price at a store serious about prices.

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

#54

Post by ianburrell »

pluc wrote: post #52
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…

I'm doing that these days at the grocery store. If your shit ends in an odd number, I'm assuming it's been shrinkflated. OJ bottle of 1.87 liter? Pass.

1.87L is 0.5 gal. The product is from the US since half gallon is common size and they didn’t bother changing the size.

There are products in US that are in nice metric sizes and weird US sizes. Like the 2L soda.

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

#55

Post by __cayenne__ »

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.

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

#56

Post by m463 »

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 product were secret code. Like ending in .23 (i made this up) meant the product was being discontinued and only stock on hand was available. There were other codes for other things.

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

#57

Post by em-bee »

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…

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.

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

#58

Post by ksec »

throwaway13337 wrote: post #16
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.

That may be true but we don't know that it is true. When I started my selling software, I priced with something.99 too. I did this because everyone else did. I was unfamiliar with these sorts of things so I followed on. I am sure that in some business at some point, there was a big positive in switching to that sort of pricing. When I switched my software to whole numbers, I did not notice a drop in sales. Things con…

Because you are selling software and your target audience are either business, enterprise or computer engineers.

The trial of whole number pricing keeps coming up in Consumer and Retail every 10- 15 years and EVERY time the test shows .99 works. Despite how most of us and even my younger self hated it.

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

#59

Post by Gormo »

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…

Both of those use cases seem like they'd only work if there were no sales tax to collect.

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

#60

Post by Too »

neilv wrote: post #20

I didn't see it mentioned, but there's sometimes another factor: When a store is selling things for .00 vs. ".99" (or any other fractional amount), I assume it's a premium-priced store. They sure aren't rounding down to those numbers. (Or, many times when I see .00 numbers, it's slightly upscale clothing stores, who're maybe using .00 to seem more upscale, but who also have near-constant significant "sales". So if I…

What does this theory tell us about MacBook Pro at $1,999?
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