Why are retail prices like £9.99, why not just £10?

Question

Why are retail prices like £9.99, why not just £10?

Answer 1

its to make us all think wow LESS than a tenner !!!!!!

Answer 2

Originally the main reason was, as Julie T says, to reduce the chance of fraud by the sales assistant. If an object is priced at £9.99 most will pay using a ten pound note. As they will require change the assistant is forced to enter this into the till.

With the advent of CCTV focussed on tills this problem may not be as prevalent as before but retailers have come to realise that most consumers do not round up when thinking about prices. If I saw something priced at £7.99 I would immediately think of this as £8 but apparently a large number would only consider the amount in pounds and think of £7.

If I may be permitted a small rant these are probably the same people who insist that mathematics is of no use in the real world.

Answer 3

Psychological reason. £9.99 is within the range £0-9.99. £10 is in the next range in a consumer's mind: £10-19.99. I'm an accommodation landlord and let out a double-room for £299 per month: within the £250-299 bracket, not £300-349 :-D

You'd be amazed by how this reduction in price of a penny (or a pound in my example) increases demand.

Answer 4

This is a business technique, always the first impression will remain in your brain, if the seller wrote £9.99, the customer will consider the goods is cheap because it is less than £10 despite being the difference is 1 pence

Answer 5

The reason dates back to the 1940's when a US newspaper magnet persuaded some of his advertisers to sell their goods for a price ending in 99 cents. The purpose being is that the customer would have a spare penny to buy his newspaper and therefore improving circulation and spreading of advertising.

As a side effect, the 99 cent figure did make prices appear much cheaper than they actually were.

Answer 6

because when you are busy shopping your brain doesn't take in the fact that £9.99 is only 1 penny less than £10.00 so you automatically think you have a bargain. I think Iceland are trying to change that way of thinking because most of their items are now rounded off to the £ and it make it easier to work out what you will be paying at the till and they need less change. Makes sense!

Answer 7

Its a common misconception that the under a tenner thing makes you want to buy. Consumers really aren't that stupid.

The real reason which has been answered by Julie way before me, is that the assistant has to open the till in order to give change. Shop workers are often poorly paid and a nice crisp tenner is so tempting to someone who might be dis-honest.

Shop owners simply don't trust their staff.

Answer 8

Sociologically it looks less and most people say 9 instead of 10.
gas in the US always end with 9/10 of a penny. In the US we have $x.95 and some say under a buck, $0.99

Answer 9

Its psychology - the first 9 is often larger, so the 99p is less significant - making you think 9 pounds, rather than 10.

It's been going on for decades. Everything used to be "and elevenpence" in predecimalised Britain. (pre 1970s)

Now, if we see something for £10, we think "thats a bit too much of a round number. Maybe they are charging too much."

I remember Comet (electrical store) selling stuff with prices ending in 4p (123.04 for example) to indicate to their staff certain offers - end of line etc. Good idea!

Answer 10

Because of something called the JND...the Just Noticable Difference.

When you say or think of a price (£9.95) your mind automatically realises that 9 is less than 10 and you think it is cheaper or better value than a product marked as £10.

Once you are aware of this principle, it never works anymore....I studied Marketing years ago, and it has never worked on me since.

Answer 11

So retailers can convince you that you can have something for under £10.

How about we introduce a 99p coin to get rid of all those annoying pennies in our pockets that we get in change?