Comment by smeej
7 hours ago
If you buy two things at $1.03 or $1.04, it's $2.06 or $2.07 and rounds down to $2.05 more often than it's $2.08 and rounds up to $2.10. That's not "some clever ways." That's so basic it's absurd. They don't know how many things you're going to buy. They don't know how many things anyone is going to buy. There's no way to game the entire system for every combination of things people might buy.
Never mind this: When was the last time you bought something in person, in cash, and bought only one thing? Just think it through for a second.
> They don't know how many things anyone is going to buy.
They have historical data, so they know on average people buy 5 things, and they will have data on what impact on purchasing behavior the changes have. Most likely they will tune for increased volume as people spend more to avoid losing a couple of cents.
> Most likely they will tune for increased volume as people spend more to avoid losing a couple of cents.
Why would they ever tune for that? “Uh oh, turns out customers are intentionally spending more money!”
I don’t understand how this same train of thought comes up every time eliminating pennies is raised. This whole train of thought collapses if you consider the scope we’re talking about (literally a couple of cents max per transaction) and how stores actually behave today. Stores are happy to drop a couple of pennies to make prices look better. But in this hypothetical world stores are going to calculate the optimal prices to round in a way that rips off customers for a couple of cents. This makes no sense. They give up a penny on nearly every item today for the sake of “pretty” prices.
Edit: Oh, I see you’re arguing that they would tune to encourage spending up to “save” the couple of cents, rather than retuning in response to the hypothetical increased spending. No doubt they would like to do this. I doubt they actually would because this is not trivial and it would require ruining the pretty prices.
If there is no rounding down, it could amount to more.
Hypothetically if you incur 10,000 transactions per year with the max rounding up of $0.04 per transaction, you're out $400.
This doesn't make a huge impact to individuals, but it absolutely will to large volume businesses.
For large volume businesses, $400 / year is what we usually call.. a rounding error.
A large volume business isn't doing 10k transactions.
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You’re arguing about nonsense scenarios. Hypothetically every business could also tack a “convenience fee” of $20 on every purchase like TicketMaster and make 200k off this imaginary customer.
Also even if a business rounded up every transaction, the expected benefit is 2 cents per transaction vs fair rounding, not 4 cents.
But there would be rounding down, so how is this relevant?
What's even to say anything will be rounded down? If Walmart says "we're going to round anything from $0.01 to $0.04 up to $0.05," do you think the free market would put them out of business out of principle, or would they get away with it? I think they'd get away with it.
Nobody has to round down. There's no government rule.
I would expect many businesses to implement ceil()-flavored rounding.
> Never mind this: When was the last time you bought something in person, in cash, and bought only one thing? Just think it through for a second.
"In cash" is entirely separate from the rounding debate and is just the "people use cards, anyway" argument. It's not relevant to this discussion. This discussion is about cash. I do buy single items at stores sometimes.
> If you buy two things at $1.03 or $1.04, it's $2.06 or $2.07 and rounds down to $2.05 more often than it's $2.08 and rounds up to $2.10.
Where's the law preventing stores from imposing an accounting fee for multi-item purchases, conveniently totaling a few cents?
> Where's the law preventing stores from imposing an accounting fee for multi-item purchases, conveniently totaling a few cents?
Where’s the law preventing someone from doing this right now? I don’t think this cynicism is justified.
Similarly, if places are willing to price stuff at $1.03 for the few extra cents they’ll collect some of the time, then they can just raise prices on 99c items right now to $1 to collect the extra cent, which they don’t do because such prices have a psychological effect on the consumer that outweighs the small gain.
> Where’s the law preventing someone from doing this right now? I don’t think this cynicism is justified.
You don't think businesses take advantage of situations for more profit?
Take this year's tariffs as an example. As you may've heard, UPS is charging customs brokerage fees of dozens or hundreds of dollars on top of the actual tariff payment; identical shipments sent via FedEx or DHL are only charged a few dollars for the service of customs brokerage, so we know UPS's actual costs for providing that service aren't that high. They saw a situation where consumers would be confused about prices and took advantage of it to make a lot more money by simply charging a lot more than they need to.
"But where's the law saying they couldn't have just raised their prices by hundreds of dollars without tariffs? Where's the law?!" There wasn't one, they could've raised their prices for international shipments before the tariffs happened. But consumers would have noticed a lot more and accepted it a lot less. They took advantage of the situation because the situation allowed them to get away with it.
> Similarly, if places are willing to price stuff at $1.03 for the few extra cents they’ll collect some of the time, then they can just raise prices on 99c items right now to $1 to collect the extra cent, which they don’t do because such prices have a psychological effect on the consumer that outweighs the small gain.
I'm not sure what you're arguing here. You admitted the $0.99 number has a psychological effect that outweighs the $0.01 gain of charging the extra cent. That would be the reason they don't do that. It's not super relevant to the discussion of whether rounding can/will be gamed.
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