Why Prices End in .99

Whether you're at a grocery store, a clothing store, or even a car dealership for that matter, Most of the time you will see prices that end in either 99 cents, or 99 dollars. Did you ever wonder why?

Reader's Digest conducted an investigation to find out why retailers use 99 instead of rounding the price up to an even dollar amount. And, they sought the advice of a Binghamton University professor.

Reader's Digest found that being that we read from left to right, we are more likely to subconsciously round down the price rather than rounding it up. And that makes sense to me. Think about looking at a price tag and in your mind debating whether or not to buy the product. Even though the price tag said, 15.99, you said to yourself, why not, it's only 15 bucks, right?

Subimal Chatterjee, Distinguished Teaching Professor of Marketing at Binghamton University School of Management told Reader's Digest;

Consumers don’t want to transcend a certain category, so even a penny less may make a huge psychological difference.

Chatterjee added that this technique is especially effective when the price is $99.99. Subconsciously we are thinking that the dollar range is still in the double digits, when in reality, we are paying one penny less than $100.

You can read the full article here.

I'm guessing they don't use this technique in Canada anymore, being that they did away with the Canadian penny.

[via Reader's Digest]