Why do most prices end with 99c or 95c?

Question

I know it probably makes it sund cheaper. Like instead of saying 70-00, the product will be priced at 69-99.

Is there maybe another reason for that?

Answer 1

"In 1876, Melville E. Stone decided that what Chicago needed was a penny newspaper to compete with the nickel papers then on the stands. But there was a problem: with no sales tax, and with most goods priced for convenience at even-dollar figures, there weren't many pennies in general circulation. Stone understood the consumer mind, however, and convinced several Chicago merchants to drop their prices--slightly. Impulse buyers, he explained, would more readily purchase a $3.00 item if it cost "only" $2.99. Shopkeepers who tried the plan found that it worked, but soon they faced their own penny shortage. Undaunted, Stone journeyed to Philadelphia, bought several barrels of pennies from the mint, and brought them back to the Windy City. Soon Chicagoans had pennies to spare and exchanged them for Stone's new paper."

Very interesting, maybe even true (up to a point), but probably not the reason prices end in .99 today. The problem: Melville Stone ran the Daily News for only a few months before selling out in 1876. Judging from Daily News advertisements, prices ending in 9 (39 cents, 69 cents, etc.) were rare until well into the 1880s and weren't all that common then. The practice didn't really become widespread until the 1920s, and even then prices as often as not ended in .95, not .99.

Answer 2

If you can remember a long time ago when people bought things with CASH, shopkeepers avoided theft by employees by forcing them to have to open the cash register to give a penny change to the customer. It was common practice in trade, if the customer had the correct amount, the cashier would take the money and not put it through the till and the shop's owner would regularly find that there had been more goods out the door than had been paid for, this was in days before everyone asked for a reciept.
I guess the practice has stuck with us to this day.

Answer 3

Several reasons actually. At 69.99, it gives the appearance of being under a perceived price point. Where you might say, I wouldn't buy a radio that costs over 70.00, your eye sees a "6" and is immediately drawn to it. Your mind subconsciously tells you that it fits your budget/criteria. So, the seller gives up 1 cent and makes their sale.

The other reason is to maximize profits. If the normal price, is 69.91, as you said, people are used to seeing end in .95 or more often .99

These pennies don't sound like much but can add 1-2% to the bottom line over the course of time.

Hope that helps.

Answer 4

There is another take on this, back in the day before sale taxes, Mr Woolworth (of the 5 and 10 fame) noted that by forcing his cashiers to hand back change (1 cent) he insured that the cashier had to ring the sale to open the cash drawer to return the pennny. (as to putting the dollar in their own pocket) The habit of just putting the cash next to the cash drawer till it was opened was elimated and thief went down from the cash till.

Answer 5

It offers the consumer the illusion of economy. Most people round off when they look at the price of something. Common sense tells you to round $9.99 to $10, but most people just knock off the change. If asked, they'd say it cost $10, but when they first see the price the brain says it's $9.

That's the only reason.

Answer 6

it is all a ideas pastime. Many entrepreneurs and merchants end with .ninety 9 because it "supposedly seems more cost-effective than rounding off to the finished dollar. would you opt for to purchase some thing it truly is $.ninety 9 or an entire $a million.00. except that, there is no importance.

Answer 7

No, that is the reason. Some bright boy sin marketing many years ago found through surveys that people were more likely to be interested in paying the 69.99 purely because it struck them as cheaper psychologically.

Answer 8

People would just rather see 2.99 instead of 3... They see that 2, and can go home and tell there husbands... I only spent 2 bucks on it! When infact, they spent 3... (I do this ALOT lol) I think it just makes people think they are getting a better deal then they are!

Answer 9

thats terrible come and live in the uk you can get it for £59.99 lol so they do that there too eh must be a global thing

Answer 10

main thing is what you know. but another may be tax matter, specially keep it below a limit(category)