It’s the three strategies of pricing:
- Price the item as XX.99 to make it feel cheaper than it is
- Price the item as a whole/round number to make it feel premium
- Price the item as a seemingly random number like XX.57 to get ahead of the shopper who are weary of the first two tactics
But you get a penny back, isn’t that great?
Jokes on you. We have sales tax.
It’s so annoying that stuff always comes out to like .04¢ over the dollar, so now I have to carry 96 cents around all day.
I’m so glad coinstar bribed like 4 senators 30 years ago so we still have these gross metal circles everywhere.
I still don’t get why you guys have that and not the business.
Sellers are responsible for it. They just don’t include it in the advertised pricing, they could if they wanted to.
It’s basically for the same reason stores charge $19.99 instead of $20.
Most people are idiots most of the time.
Some people are idiots some of the time.
No one is never an idiot.
Can confirm. I’m idiot most of the time
I always round up the price when I see $X.99 but my grandmother always rounds it down and it pisses me off
They’re trying to fool you! Don’t be a sheep!!!
I always round way up because sales tax is so high here. 17.99 = $20. I’m usually within the $1 range when I check out.
Still boggles my mind that tax is not included in the price in the US.
It encourages more consumption
Hmm, this is the first time I get this argument, and I think you are on point.
The other argument I’ve heard is so that people will see how much the government is taking from them, and be angry about it. This would be particularly useful for politicians who campaign on smaller government.
I just wished it was mandated to list prices to include all the taxes along with it. Whether it says $19.99 or $20 still isn’t the actual price.
Recently had the worst of this. Was craving chocolate milk, find a nice size bottle of it for $3. Get to register. $6.63 total price because the glass bottle had over a $3 deposit.
Hey everything on steam is the listed price if ya live in California. We dont have a digital sales tax, which is weird.
Right? Of all the states California is the one with no tax? Even Texas has that shit.
If I had to guess its probably because the stste was kinda in a weird place when digital products were first becoming a thing so it was never implemented, and now nobody cares enough to try.
Then let’s stop talking about it 👀
Unfortunately taxes aren’t uniform across a metro area or even within a city.
Yeah, and? That doesn’t stop the individual stores from already calculating the taxes you’re going to pay at that location and putting that price on the labels on their own shelves.
Because when they advertise, those advertisements cover a larger area.
I’d rather advisements list the highest price for the area they cover than have false advertising with the prices at the store.
Then leave the advertisement alone. They still print the prices on tags at each store location.
Let them send out flyers saying item A is $20 *plus local taxes but when you get to the store the pricetag on the shelf should say $23.50 or whatever the markup ends up being at that location.
I just wished it was mandated to list prices to include all the taxes along with it.
It is, in the EU.
But it IS how we see prices. If there weren’t science behind it, they wouldn’t be doing it.
A lot of marketing strategies are pseudoscience. Just like a lot police investigation practices or body language assumptions.
JC Penny kinda showed that no. It isn’t pseudocience
What’s the story about JC Penny?
The CEO decided that clients were smart intelligent people and treated people as adults. Aka, no discounts, no 99 pricing, it just costs what it costs, as low as we can make it, plus our margin.
JC Penny was already not too well, this helped sink them
Poor guy. Tried to do some good in the world and paid the price for it. Nobody ever went broke overestimating the stupidity of the average person.
“Why would I pay $25 for these pair of pants at full price when I could pay $24.99 for those [identical] pants that are half off?! Clearly, that’s the better deal!”
Hell, could probably even make it $29.99 for the identical pants and people will still go with that because they think they’re paying five more bucks and getting a $60 pair of pants
It was less about the .99 pricing and more about “Sale” pricing and ‘coupons’. Retailers will put a pair of pants on “Sale” for 50% off 51 weeks out of the year and people think they’re getting a great deal whereas when it’s not half off, they just don’t buy.
Some marketing strategies are pseudoscience, but this one isn’t.
Does anyone in the thread have actual info to back this up?
You should be able to find various tests and studies of this phenomenon on Google
So, it’s a “no” than?
It’s a yes but find it yourself
This doesn’t meet the bar you want, but my marketing professor called the .99 idea the single greatest thing to come out of marketing in a century.
Sounds about right.
Marketing hasn’t done anything positive for humanity. It is all just to manipulate people into buying shit they don’t need. It is the main driver for the overconsumption.
I was watching a PBS documentary about the first humans in the Americas. All the scientists are super cool until you get to the American anthropologist who starts using phrenology to explain why Native American tribes shouldn’t be given repatriation rights, only for a Danish geneticist to say “yeah, this is absolutely a Native American and i am willing to testify to that in any court of law”
Pseudoscience is still all the rage if it can be used to push a political agenda.
dowsing for suckadrippas
The science is about how you initially react to the number. Your brain will see $19, and immediately you’ll think it’s $19. Only upon further inspection and processing through your cognition, you recognise that its $19.99, which is basically $20.
It’s that initial reaction they want, to grab your attention. Anyone who is going through life without leveraging their higher thinking will fall for this shit. Anyone who thinks, at all, won’t.
Unfortunately, there’s a nontrivial number of people who fall into that first category. People who were never taught to think. They just do.
But it IS how we see prices.
I don’t. Never did. I’m sure I’m not the only one.
Same, I’ve always just rounded up. Even when it comes to things like .50¢ I still just round it up to the next dollar.
You do though
At some level you will favor the 19.99. You might justify it with some other rational but there will be the bias.
No, I really don’t.
No, I dont though.
It really depends on the study you choose to believe into. (No, everyone does it, isn’t a pro argument. People always had strange beliefs which later changed. I think it’s called major consensus narrative or maybe consensus reality
I like this hill, I’ll stay here. Thank you.)
This is locally grown artisanal bullshit, it’s actually $300, please tip.
please tip
I’ve actually started carrying cash again for the first time in 20 years because I’m sick of every fucking POS machine in the world asking for tips. Yes, I can choose not to tip, but there’s an emotional cost associated with that decision. There’s a cost associated with just seeing the option instead of being able to simply pay for my item and go about my day.
If there is any research from the last 50 years suggesting this actually works, I’d love to see it.
Yes, you can find plenty on Google I’m sure
The fact that almost every price for everything everywhere is like this is pretty compelling evidence that it works.
“It’s popular so it must be good/true” is not a compelling argument. I certainly wouldn’t take it on faith just because it has remained largely unquestioned by marketers.
The closest research I’m familiar with showed the opposite, but it was specifically related to the real estate market so I wouldn’t assume it applies broadly to, say, groceries or consumer goods. I couldn’t find anything supporting this idea from a quick search of papers. Again, if there’s supporting research on this (particularly recent research), I would really like to see it.
Doesn’t it have its roots in forcing clerks to give change and recording the sale (rather than pocketing the money)?
This is called: Left Digit Bias
$20 and $10 shipping: 😡
$30 and free shipping: 😄
Part of it is that there’s less hidden costs. I like it when it’s just “the total is $30” instead of “there’s $8 shipping and a $2 service fee and then $4 in taxes and…”
I’ve also seen some online stores lure in a customer with a really cheap initial price and then on the last page just slam them with insane shipping and handling fees hoping that the customer either doesn’t notice or feels too invested at this point to cancel their purchase.
But yes, part of it is also people are stupid when they see the word “free” as if the store wouldn’t move the cost somewhere else.
That at least allows you to retrieve the full amount if you return the goods. Shipping costs you don’t get back.
I don’t understand people who won’t pay £5 for shipping, but will instead spend another £15 on something they don’t need so they get free shipping.
All you’ve done is lost money.
It depends. If it’s something I know I’ll use, especially a consumable, I’ll do it.
I’ll admit, this works on me sometimes.
I hate that it does, but it do.
It is kind of a dick move when companies overcharge for shipping. I only charge calculated shipping on large or heavy items because those are the ones that vary a lot and I don’t want someone in zone 8 (like Southern California or even someone in HI buying it and shipping costing more than they paid. If it’s under 1 lb then I just give free shipping and bake it into the price.
This reminds me of my early shopping days using EBay, where it wasn’t uncommon for sellers to under-price their products so they show up near the top of the price (cheapest-most expensive) sort pile, and then charge an outrageous amount in shipping.
I’ve found that almost always (at the time), that the seller offering free or low cost shipping was usually cheaper.
That was because their fees were based on the sale price of the item minus the shipping. So they were only paying fees on 1 cent. They changed the fees so that the total sale including shipping is calculated.
I doubt it works on me. I have bought smaller items due to doing the per unit price in my head (don’t trust what they put there and two often then apples and organges the units) or completely not bought something or bought some alternative (potatoes instead of bread or rice instead of potatoes).
But its true though, don’t you think they would save on the printer ink if it wasn’t the case?
Everyone here is hilarious thinking they’re immune to it.
Living in Canada, this shit never worked for me.
Our laws require that pretty much everything is taxed, some more than others, but taxed nonetheless. Despite this, our laws also allow for the tax to be excluded from the price listed for an item, so tax has always been an unpleasant surprise during checkout for me.
I’m sure many other Canadians can echo my sentiment.
The fact is, I’m always expecting to pay between 10 and 15% more on pretty much everything when I get to the checkout, so I tend to do math in my head to figure it out. Let’s just say that when I see $4.99, it’s easier for my brain to figure out 10 (or 13%, or 15%) of $5 than it is to figure out the tax on $4.99, so I err higher rather than lower on everything.
I see $4.99, I think $5 +tax and I figure that will set me back somewhere between $5.50 and $6 at checkout. Doing the math, the current HST tax in Ontario where I am, IIRC is 13%. 13% of $4.99 is $0.6487 (the company will round up to the nearest penny, so 65 cents), which is $5.64. going from $5 at 15% (which is what I’ll do in my head for simplicity), I’d estimate it’s $5.75 at checkout, and get pleasantly surprised when I save 11 cents because the tax was less than I anticipated.
All of this shit is kind of moot IMO, since I think people aren’t looking at prices nearly as much as they used to. When I was young, debit cards didn’t exist, credit cards were a tedious process of filing out paperwork, and so most of the time people carried cash. It was common for people to add up their costs as they went to ensure that the cash they brought would cover the items they’re buying at the grocery. For smaller transactions like convenience stores, you’d just do it in your head, and for big ticket purchases, like appliances, furniture, vehicles, etc, you’d use cheques or credit cards because the hassle of doing that was outweighed by the liability of carrying thousands of dollars to the store to buy a thing.
With debit/interac/whatever, and the chip/sign, or chip/pin process (and/or “tap” to pay), you have convenient, and instant access to your entire life savings on a whim with near zero effort or inconvenience. It’s never been so easy to spend money (especially money you don’t have - eg overdraft or credit cards).
When I started to do my own grocery shopping, sometime after debit/interac/chip&pin was made to be commonplace, I rarely looked at prices. I assumed the price was reasonable for what I was buying, and concerning myself with the nickels and dimes of it all was more effort than I cared to put into buying something I wanted or needed.
With the prices of everything going haywire in the last 5 years or so, I find myself looking at prices a lot more and going for alternatives to my “usual” brands of products simply due to price alone, especially when grocery shopping. If I can kick my grocery bill from $300 to $250 by simply buying smarter, that’s a cheap date I get to go on with my spouse that I otherwise couldn’t afford. That’s more valuable to me than buying name brand cereal or cans of Campbell’s soup over the store brand.
IMO, I’m the problem… or rather, my previous mentality was the problem that in part led to the crazy increase in pricing. I didn’t concern myself if something was a cheaper option and just bought whatever I wanted or whatever I was used to buying. I don’t have brand loyalty beyond “this was good/worked in the past, so I’ll buy it again”. That amount of “loyalty” doesn’t extend to significant increases in the price of things. The prices went up and while my grocery bill went up, I didn’t pay much attention to it. That’s just what it cost me. The cost always changed because I wouldn’t always buy the same things, nor the same quantity of things. So I expected it to be fairly random. That created a false loyalty to products that just kept going up in price. I kept paying that because I wasn’t paying attention. So they kept going up because the company didn’t see a drop in sales because of the increase in price.
Now, I’m much more conscious of what I’m buying. I’ll compare not only the cost, but the quantity of a thing. If I can get 700g of something at $5 but an alternative has 1000g for $6. I’ll get the $6 item, since I’m paying more, for a lot more, therefore I’m paying less per gram. I’ve become the kind of shopper that most companies can’t keep. If prices go up, I’ll jump to another brand that’s cheaper. If the quantity goes down (shrinkflation) I’ll go to a brand that gives me better value for my dollar.
I’m one step away from cutting coupons here. I’ll do it too.
At the end of the day, it’s all about economics for me. If it’s going to take me more time to compare, or find coupons, or whatever than I’m saving by doing that, then I won’t do it. Right now, cutting coupons falls below that value line. I put my time ahead of the proposed savings by cutting coupons. My time saved by not doing it, is simply more valuable to me right now. If/when that changes, I’ll start doing it.
Fuck corporations.
