I’d be surprised if they’re allowed to round up $31.491 to $31.50 by law. I would have thought the rules are like those for sales tax (example, which demands rounding up or down to the nearest cent - see section 5 in the link).
1 gal x $3.499 = $3.499 rounded UP to $3.50
2 gal x $3.499 = $6.998 rounded UP to $7.00
3 gal x $3.499 = $10.497 rounded UP to $10.50
4 gal x $3.499 = $13.996 rounded UP to $14.00
5 gal x $3.499 = $17.495 rounded UP to $17.50
6 gal x $3.499 = $20.994 rounded DOWN to $20.99
7 gal x $3.499 = $24.493 rounded DOWNto $24.49
8 gal x $3.499 = $27.992 rounded DOWN to $27.99
9 gal x $3.499 = $31.491 rounded DOWN to $31.49
10 gal x $3.499 = $34.990 ie exactly $34.99
So if you want to get one over on The Man, make sure you always buy your gas in amounts that end in 6, 7, 8 or 9 gallons, preferably 6.
This does not make a lick of sense. You buy gas in at least 1/1000 th of a gallon increments. No matter what the price of gas you will be buying gas in fractions of cents most of the time and in rare cases the bill will come out as even cents.
A certain brand that I buy is consistently cheaper than all others nearby, even on the adjacent corners. Sometimes cheaper by just one cent, sometimes cheaper by 5 cents. I ALWAYS buy there because of this, on the hypothetical theory that EVERYONE ought to, and if they did, it would perpetually force gas stations into price wars.
Yet there ARE always plenty of customers at those other pricier stations. Why? I’ve even seen occasional price differences of 10 or even 15 cents a gallon, and people STILL buy gas at the expensive place! :smack:
If they are rounding up in all cases, they are violating the law. And I have had attendants give change on purchases in my favor to the nearest nickel (i.e. 2 cents). It seems unlikely they’d fight for the .9 cents and give me 2 cents on my soda.
That does not support the claim they always round up. It only says that the .9 pricing is psychologically beneficial to them, and that customers will misestimate their expected price rate. But the customers still see the actual cost displayed.
Brand loyalty, discount cards, perceived quality of the product, trust of chain vs individual store owners.
Seriously? I always mentally round prices up. “So, we could get two of those for $32, or that really nice one for $28.” Yes, they were $15.95 and $27.99, but who does the math? (in which case I’d have to figure out the state and county tax, too).
Your professor was a nincompoop (or possibly was seeking to determine which of his students were).
Gas flows out of a pump in a continuous stream, and as it does the displayed cost increases smoothly, maintaining the advertised ratio of dollars to gallons. People pumping gas rarely are trying to pump a precise number of gallons - they pump either until the tank is full or until a desired total cost has been reached. In all cases, the total they pay will never be more than half a cent off the exact amount, regardless of how many gallons were pumped.
Although I know $3.99 9/10 ~ $4.00 - I think on some level it does effect me. Smart people always think these tricks don’t work on them, but these tricks (with food at least - granted not the same thing) do fool smart people too.
I think gas is the one item we purchase that a decent percentage of people know the price AND it changes often.
Also IMHO - the people that are going to the other corner and paying one cent more aren’t necessarily stupid - they just have better things to do with their time. I’m not going out of my way to save $0.10 - $0.50. I just don’t usually look - I usually pump at the station by my house, but if on the road - I pick whatever is close. I sometimes pay attention when there is more than one on the corner, but more often than not - they have been the same - so I just assume the market is efficient and don’t usually check.
Kind of like the joke about the economist and the $20.00 bill - if you haven’t heard it - something like:
Two economists are walking down the street - one looks down and says, “look a 20 dollar bill.”. The other says - “don’t be ridiculous - if there was a 20 dollar bill there, someone would have picked it up already.”
I’ve read about idiots who drive all around town when gas prices spike, looking for the cheapest. They end up spending more on the gas they wasted driving around then they amount they save.
In my area, one less expensive chain has pumps that try to cut out gallons too early (when a 14-gallon tank is at less than 1/4 full and the cutoff kicks in around 3 gallons, something’s very wrong) and they ignore customer comments. Thus, we go to a slightly more expensive chain that’s easy to get to along our route home and has pumps that operate correctly.
