Why is that?
Tradition, and it makes the gas price look almost a full cent cheaper than it actually is.
It’s pretty fucking stupid, isn’t it? But it’s the same thing for stores. Like I’m going to think $9.97 isn’t 10 dollars.
I actually like restaurants (and they’re usually a bit more upscale) that list prices in even dollars: like “Fettuccine Alfredo with Shrimp” $18.
Psychological pricing. There’s probably a half dozen threads here about this, but let me lead you to the horse’s mouth.
Actually, a lot of restaurants even do away with the the dollar sign: Like “Fettuccine Alfredo with Shrimp” 18.
Hard to believe, but there once was a time when gasoline was only a few cents per gallon. If it was priced at 9 cents, the seller would lose money. If he priced it at 10 cents, customers would say it was highway robbery and balk at paying. Unlike much larger prices, like an item for $50 priced at $49.99, the increments had to be much smaller, so gas was priced at 9.9 cents and this accomplished the task.
We’ve been stuck with it ever since.
In the case of gas prices specifically, it goes back to the Depression, when the federal government raised the gas tax by 1/2 cent, and the retailers raised prices by exactly that much.
Then they became aware that customers didn’t really notice the decimal point.
I think people would notice if the .9 was changed to another number, since they’re so used to seeing the .9. I wonder what would happen to sales if a gas station changed it to a .2 or .3… But then jacked up the penultimate digit by 1. 
Yes!
When I see gas at $2.479 per gallon, I say it’s $2.48. Everyone else I know will say $2.47.
They do this on military bases too. I called AAFES (the people that run the gas stations on Air Force bases) and asked why they do that, because it is just a scam to make gas look cheaper. They said “That’s the way ALL gas stations do it, that’s why we do it too” :rolleyes:
Hey, I’ve known people who would call a $599 product “only 500 dollars.” It definitely works on some people.
I’m sure they do it because it actually works.
I was at a winery recently that had prices per bottle listed for their wines, but no prices for the various foods they offered. My panini was $18 (triple what it was worth) and our cheese/meat/cracker tray was $20 (double what I guessed).
I could have inquired about price, but that would have felt petty. Will not be going back, though.
I do exactly this when I’m trying to explain to my wife how much something costs that I very badly want.
It’s probably mostly from tradition nowadays that they retain the 9/10 of a cent, because at today’s gas prices, that is a negligible amount. Back in the 1950s, when gas was, say, 17.9 cents a gallon, the .9 represented a significant percent increase in the price. Even when I started working at a gas station in 1968, regular was 32.9 cents per gallon, so the .9 represented almost a 3% increase in the price.
Deleted: math is off and no time to check inside the edit window.
I thought Cecil had covered this, but I guess I was thinking of this column (which is close enough):
This has been covered many times before. Please see this entry in the Unofficial FAQ.Go to the link to see actual links to other threads.
The only time I can remember seeing a gas pump price not set at 9/10 was during the second oil crisis under Carter ('78-‘79). It was when US gasoline went over a dollar a gallon for the first time and a lot of smaller, non-national brand gas stations’ pumps were not equipped to go higher than .99 & 9/10. Some of them took up the (illegal) practice of setting the price at half what they needed it to be and put stickers all over the pump warning you that this was actually the price per *half *gallon so you would owe *double *what the pump said. Because it was confusing already they would set the ‘half’ gallon price at an even amount ($0.60/half = $1.20/gallon) without the 9/10 thing.
It didn’t go on for very long as it caused a lot of arguments at the pump which, combined with long gas lines, made consumers very unhappy. Like I said the state (NY) quickly declared it illegal and forced these stations to stop selling gas or upgrade their pumps.