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Old 06-20-2003, 01:25 PM
godzillatemple godzillatemple is offline
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Why do all gasoline prices have that extra "9"?

Who made the decision that all gas prices should be, say, $1.599 instead of $1.60? Somebody once tried to convince me that the extra nine does NOT represent 9/10th of a cent but instead indicates that you are paying the stated price for 9/10th of a gallon, but I can't believe that is the case.

Assuming the extra 9 does indeed represent 9/10th of a cent, where did it come from, and why is it so universal? Is it done this way outside the U.S.? And why is this the only thing that is sold this way?

Barry
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Old 06-20-2003, 01:40 PM
CookingWithGas CookingWithGas is offline
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Same reason that a car costs $14,999. To keep under that psychological barrier. Even though everybody knows that it's only a dollar, "under $15,000!!" actually does get more attention.

If there were two gas stations with $1.599 and $1.600, and you chose on price alone, what would you pick?

Also, pricing in tenths of a cent started back when gas was about 10 times cheaper in absolute dollars as today, so that 1/10 of a cent was not negligible.
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Old 06-20-2003, 02:20 PM
Shoeless Shoeless is offline
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So, back in the olden days, did they have gas prices that ended in something other that .9? (Sorry for the hijack.)
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Old 06-20-2003, 03:08 PM
StephenG StephenG is offline
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Interestingly enough, in Ontario, that tenth of a cent digit is not always a nine. That's to say, I've seen gas prices such as 63.7 cents/liter, 70.1 cents/liter, and 59.9 cents/liter.

Gas isn't the only thing sold this way, either. Ever seen stock prices?
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Old 06-20-2003, 03:25 PM
godzillatemple godzillatemple is offline
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Quote:
Originally posted by CookingWithGas
If there were two gas stations with $1.599 and $1.600, and you chose on price alone, what would you pick?
Personally? The one the was closer and/or on the same side of the street on which I was currently driving. Do you really think 1/10 of a cent difference matters to anybody?

Barry
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Old 06-20-2003, 04:17 PM
desdinova desdinova is offline
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Quote:
Originally posted by godzillatemple
Personally? The one the was closer and/or on the same side of the street on which I was currently driving. Do you really think 1/10 of a cent difference matters to anybody?

Barry
The one mill doesn't matter, what matters is the difference between the 5 and the 6. Psychologically, it seems to make a difference to people, or so the rationalization goes. They're betting that people will see "$1.5" versus "$1.6", and not do the math and realize they're saving one penny for every ten gallons they buy.
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Old 06-20-2003, 05:08 PM
handy handy is offline
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If you buy one gallon at $1.59 9/10 you pay $1.60?
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Old 06-20-2003, 05:25 PM
Johnny L.A. Johnny L.A. is offline
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Quote:
If you buy one gallon at $1.59 9/10 you pay $1.60?
Andy Rooney went to a gas station back in the 1980s(?) and bought exactly one gallon of gas -- then asked for his $0.001 change. The attendant wouldn't give it to him.

Attendant: "It's really $1.60!" (Or whatever the price was.)

Rooney: "No, it's really a dollar fifty-nine and nine-tenths. I want my tenth of a cent change."
  #9  
Old 06-20-2003, 06:23 PM
Ringo Ringo is offline
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Federal gasoline tax is 18.4/gallon, so that gets you into tenths of a penny in the price calculation. States add their own taxes, many of which include some tenth of a cent.
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Old 06-20-2003, 07:53 PM
engineer_comp_geek engineer_comp_geek is online now
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I was under the impression that the law allows you to do business transactions in amounts to the nearest 0.1 cents, even though the government has never (as far as I'm aware) minted a 0.1 cent coin. In other words, the gas stations use .9 cents because they can't get any closer to the next digit up (like .999 cents). Is this true or some bit of nonsense I picked up over the years?
  #11  
Old 06-20-2003, 08:03 PM
Polycarp Polycarp is offline
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"The law" doesn't specify anything about business transactions except what's in the state civil codes and the Legal Tender law requiring you to accept U.S. currency in payment of a debt.

Some stocks sell at, e.g., $1.56 and 1/4 a share, i.e., $1.5625. So even fractions of a mill are legitimate.

I suspect somewhere in the archives of seldom-dealt-with laws, there are provisions in at least some jurisdictions that you must pay to the next nearest penny when a price comes out at a fraction of a cent. Though I'd love to go out and buy a half cent from a coin dealer and buy five gallons of gas at $1.399, and pay him $6.995 -- a five, a one, three quarters, two dimes, four cents, and that half cent. Unfortunately, I'd probably lose about $50 on the deal!
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Old 06-20-2003, 08:37 PM
Freiheit Freiheit is offline
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Yeah, it's kinda deceptive. But they get screwed a little bit in the end--for taxes, the 9/10 is rounded off...
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Old 06-20-2003, 09:30 PM
Nametag Nametag is offline
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There's no good reason for it:

http://boards.straightdope.com/sdmb/...hreadid=146854
  #14  
Old 06-20-2003, 09:34 PM
Johanna Johanna is offline
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When I was a kid and went with my parents to buy an aquarium in a pet store, the owner added up the tax on the purchase and it came to an amount ending in .5 cents. So to give us change, he took metal shears and cut a penny in half and gave us half a penny.

We laugh now, but the Spanish gold doubloon that was the origin of the U.S. dollar actually was sliced up into pieces. Pieces of eight!
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Old 06-20-2003, 10:28 PM
AWB AWB is offline
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Back in the 1970's when gas first went over $1.00/gal in the US, pumps weren't able to be set to the actual price. (Pumps were mechanically set to the price, instead of electronically as they are now.)

Prices were set to, say, 52.9 cents/gal. Next to the prices was a note stating that the price displayed was actually half of the actual price. So we were really paying $1.058, instead of a price ending in 9.

(BTW, the unit of 1/1000 of a dollar is a mill.)
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Old 06-20-2003, 11:57 PM
red_dragon60 red_dragon60 is offline
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Anyone seen Superman 3? Or for that matter, Office Space?
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Old 06-21-2003, 12:33 AM
Tuckerfan Tuckerfan is offline
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Quote:
Originally posted by red_dragon60
Anyone seen Superman 3? Or for that matter, Office Space?
"What happened?" "I must have got the decimal wrong. I always do that." "Now's a fine time to tell us that!"
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Old 06-21-2003, 02:28 AM
asterion asterion is offline
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For what it's worth, gas is also sold to the thousandths of a gallon. It seems to me if you're going to take the volume out to three decimal places you need to take the price out to three places as well. Whether or not this is exactly why, it does seem to be a reason that at least makes sense.
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Old 06-21-2003, 03:12 AM
lite lite is offline
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I just under 1/4 tank so need to get gas anyway. I'm gonna try to get teh perfect gallon and see how they charge

I'm such an asshole
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