Comment by rkomorn
3 months ago
There's a reason everything is priced at some variety of .99, 99.99, 999.99, etc: it sells better than 1.08, 108, 1080, etc.
My point is getting the consumer to eat the sales tax on top is just a wise trick by US businesses, and nothing to do with complexity.
That's been debunked. Every consumer just auto-rounds in their head. Companies keep doing it because of tradition more than anything else.
It is a wise trick, and exactly the job of government -- to prevent the public from getting tricked by businesses.
> That's been debunked. Every consumer just auto-rounds in their head.
Has it?
I'm searching around and not coming up with much that says that's the case.
On the other hand, here are some recent-ish links that suggest it still works:
- https://www.rd.com/article/why-prices-end-in-99/
- https://capitaloneshopping.com/research/pricing-psychology-s...
This one suggests it depends on the consumer, with "highly numerate" consumers being less likely to think the price is lower (but presumably also less common in the customer pool):
- https://business.missouri.edu/about/news/99-ending-prices-ar...
Edit: searching for "charm pricing" specifically suggests it does work, but I suppose maybe there's some bias on the context in which people use that term.