In the United States, why does the price of a gallon of gasoline have nine-tenths of a cent stuck on the end? I can’t think of any other product whose price contains tenths of a cent.
Why, it’s to make us think we’re getting a deal!
No one would pay $1.45 a gallon, but we’d line up for $1.44[sym]9/10[/sym]
I’m sure it goes back to oil company price wars and such.
It’s the same reason that you see products in stores priced at $14.99 instead of $15.00 or you see cars priced at $19,999 instead of $20,000. As silly as it sounds there is sound psychological backing for this pricing strategy. Even though you and I know intellectually the difference between $19,999 and $20,000 isn’t worth considering you somehow still feel ‘better’ buying the $19,999 car and it will sell better than the guy across the street who advertises the same car for $20,000.
The same process is at work with gasoline. The reason you don’t see fractions of a cent used in buying other products is that you usually can’t buy a fraction of the product. You buy a gallon of milk (or 1/2 gallon or whatever) but the store doesn’t let you dump out a portion and just buy what’s left. You can, however, do that with gas. You can buy any amount of gas you want from a tiny cupful to tens of gallons. The little counter easily keeps track of the fractional cent as applied to your total purchase. Instead of $1.59/gallon they can sell it for $1.599/gallon. Add up that fractional cent across 100,000 gallons and you have a little extra money.
I guess every little bit helps.
One guy started doing it on his big sign and the guy across the street/down the road had to so he didn’t look higher priced. Remember that at one time gas cost 19.9 cents/gallon so the apparant difference between 19.9 and 20.0 was very significant.
Haj
It’s not a “tenth of a cent” it’s a mill (Or at least it was ages ago, according to this report to the house of Representatives - I know that this has been discussed here before, but I think the verdict is that the ‘value’ exists, but there have never been any coins. But let’s nit hijack this too far)
[now back to the actual question]
The same kind of ‘added decimals’ on petrol prices can also be found in Switzerland, but with the difference that the final digit is not necessarily ‘9’. I have seen prices of CHF1.32[sup]5[/sup] as well as CHF1.32[sup]9[/sup] (per litre that is). It seems however to be on its way out. Most ‘modern’ petrol stations don’t have that extra decimal.
Fuel us sold by the dollar amount first, not the volume, so it works.
During WW II, and for some time after, the state of Missouri issued it’s own Mill “coins”. My wife lived here at that time and has some one mill and five mill “coins” IIRC, some are metal and some are plastic. When I first saw them I had no idea what they were.