Does anyone know why gasoline is sold by the tenths of a cent?
I believe this is the only item sold this way. I’ve been looking for an answer to this question for quite some time and thought that someone here could put my trivia-packed brain to rest! Thanks!
According to this site, there is no good reason for the nine-tenths custom. It appears to have started in the 1920s or '30s, and is being banned in some states. The pricing of gasoline with fractions of a cent, combined with uneven rounding off practices, appears to give the seller a slight advantage in dollar terms. However, it mainly appears to be a selling thing, the same as selling a $100 for $99.99. Remember, though, that gasoline was very cheap in the '20s, and that 1/10 of a cent was a more significant part of the price of a gallon.
Nametag, Thanx for the info and the link
I read a lot of the link and although it is interesting and true, ultimately I think its a great big “so what?”.
Yeah, they say $1.75.9 the same as they say $99.99. Big deal. We’re talking about a few pennies here. I throw 5¢ deposit bottles in the trash all the time…
Nametag wrote:
In absolute terms, it was cheaper. Around $.10 per gallon or so. But those 1920’s pennies were harder to get. Expressed as the amount of time it took to earn enough to buy a gallon then and now you get a different picture.
For instance assuming the average wage in the '20s was $3,000 and they worked 2300 hours per week you come up with $1.30 per hour. Making the assumption of $35,000 today at 2080 hours you get $16.83. In the 1920’s it took 9.2% of an hour to by a gallon of gas. Today it takes, at $1.50 per gallon, 8.9% of an hour.
The numbers used come pretty close to being WAG’s but should be close enough to demostrate my point.
Perfectly true, but rather irrelevant to the issue of why gasoline was priced at $0.099 rather than $0.100, don’t you think? Whether a gallon of gas was a king’s ransom or a pauper’s pittance, a tenth of a cent is 1% of ten cents. That’s more significant than the 0.067% of the price of a gallon of gas that it currently represents. MY point was that a tenth of a cent was a significant discount back then, whereas it isn’t now.