Why do prices end in .99?

A more interesting, if equally elusive, question is why so many irrational quasi-scams persist in the retail market.

I don’t mean to shill for the JC Penney Corporation, but I notice that they have launched an ad campaign based on eliminating dodgy come-ons like .99 pricing, coupons, so-called “sales”, etc.

I’m not so captivated as to rush to Penney’s for a fresh batch of tighty-whities, but this seems like refreshing and long-overdue progress. Especially compared to a local supermarket’s recent flurry of byzantine incentives, e.g. “Buy Any Ten Items From This Brand and Save $10”.

Post-rant question: is the persistence of intelligence-insulting gimmicks a top-down or bottom-up phenomenon? That is, does the public crave and demand them, such that they’re actually effective (they work), or are marketers so habituated to them that they can’t or won’t abandon them?

So who invented the hat?

The point isn’t to insult your intelligence, but to override your automatic thoughts. It is not expected that anyone doesn’t know that $4.99 is really $5.00, but that you don’t notice it in the split second that you see it. And not even that works now that we are accustomed to it, but the problem is that advertizers assume that you’ll now see $5,00 and and assume it really means $6.00. JCP is taking a chance that this is not true, and is using people’s erroneous interpretation to create dissatisfaction with other brands.

They are also taking a chance in changing their name. I think it’s an odd choice, especially since the name would fit so perfectly with this advertizing campaign. (They don’t try to trick you by removing a penny.)

I remember a study or two showing that such pricings do increase sales, even if they are irritating to consumers :slight_smile:

Yeah, I remember reading a study that stated if pricing in .99 reduced the first figure if a ten, the it would increase sales but if it only reduced the second digit there would be no change in the number of sales.

Eg. An item previously sold for $20 but reduced to $19.99 would statistically have increased sales, but one previously priced at $21 but reduced go $20.99 would have no change in the number of goods sold.

Many years ago when I worked for the National Cash Register Company I heard that the reason for the .99 or other odd penny pricing was to force the clerk to ring up the sale to make change rather than to stick the money in their pocket.

Because the clerk can’t carry change in his pocket?

I sold vacuum cleaners, door-to-door, years ago, and I wanted to be successful (I only lasted a month, that didn’t work out), so I studied vacuum cleaners. It turns out that all opinion surveys say customers want quiet vacuum cleaners. They all say it. They all say they hate the noise level of the vacuum cleaners currently on the market, but when it comes time to actually buy, they equate noise level with power level. They won’t buy quiet vacuum cleaners. Even though they say they want them. Quiet vacuum cleaners are perceived as being “weak”.

Which brings us to the OP’s question:

It’s both. Marketroids are habituated to them precisely because they work. Most of the public are idiots who buy or not buy based exclusively on immediate perceptions, even when those perceptions are false, like noisy vacuum cleaners = powerful vacuum cleaners. .99 cent pricing will end if (and only if) the idiot public stops responding to it. Not before then.

I remember reading somewhere it was the Wrigleys, back in the day when they sold soap, who came up with the $X.99 pricing. But I don’t know where I read that.

In reality people buy the noisy one not for the false perception of power but to entertain themselves through their dogs.
Dogs are driven absolutely nuts by noisy vacuum cleaners they’ll chase and bark and bite and run around in circles and it’s fun to watch them go nuts, better than TV.

I remember when I visited the Kenedy Space Center that there was this icecream stand selling $0,99 cones. I bought one and it costed something like $1,03 with the sales tax added. I then wondered does ,99 prices attract people when they know that added tax rases it over 1,00?
I understand those prices here in Europe where sales tax is already included, but in US where in most states the prices are without sales tax I’m wondering.