Why do companies sell their products for 'something' 99.99 dollars (eg. $499.99)?

Answer 1

$99.99 LOOKS less than $100. All of the .99 numbers sound less than the nearest rounded up huncred, thousand, etc. They actually study what people are most prone to buy, and the .99 makes a BIG difference.

Small Example:
QUOTE
May 11, 2006 10:05

Get Your Files Back For The Low Price of $10.99

By Jon Rant
Editor ESS
Now I've seen it all. Security firm Sophos has reported on a new Trojan horse that freezes computers, and then posts a message that it will delete files every half hour until the user telegraphs $10.99 to a designated account. Holy Cow.
I guess by now we all understand the logic of charging, say, $99.99 instead of $100 for a product or service. There's something in people's brains that doesn't round off numbers in the way that mathematical logic would suggest. Given that logic, I would think that $9.99 would make sense, as it suggests a price of under $10. But $10.99?
END QUOTE
http://enterpriseserver.techweb.com/security/showBlog.jhtml?articleID=187202145

Answer 2

Two reasons.
1 what everyone else said about fooling shoppers.

2 to track employee theft. For example if an item sells for $10 and it's paid for with a 10 then it would be easy to pocket the money, especially from small employers. Now if you have an odd change amount, you are more likely to force the checker to open the till. now the employee can still pocket the cash but there still is a record in the register memory or on the tracking tape. IF you have a bunch of no sales or drawer openings then you have a place to start to track theft.

Answer 3

It fools the brain somehow. I was under the impression that we think with our brains but somehow even though I know why they do this and think to myself well yeah its really just $10 when shown as $9.99 but for some reason it still looks better and I know I will be more apt to purchase the product at $9.99 rather than $10.00.

Answer 4

Dollar is an international currency. So you can convert any currency to dollar at any given time or place. So the use of Dollar

Answer 5

They think it gives a psychological advantage, both Wal-mart who use the lowest price point and myself who uses level dollars in my clothes store disagree

Answer 6

Looks better than an even amount i guess?

Answer 7

IF U BOUGHT SOMETHING 3.99 AND SOMEBODY ASK U HOW MUCH DID IT COST? YOUR ANSWER WILL BE 3
ENSTEAD OF 4.