who uses prices ending in 99

[goingd]

Just out of curiosity, who here uses prices ending in 99? Like, "Two Week Intro for $19.99," or "9 Weeks for $99." Does your tuition price end in 99? Or your uniform and other item prices? The question isn't just for school owners, but for students or anyone paying fees and such.

Thanks. ^_^

 

[NPTKD]

Why?

 

[Jade Tigress]

Why?

It's a long time marketing practice. Psychologically, it's supposed to improve sales. By ending a price in 99, it *appears less expensive*.

19.99 = it was less than 20 bucks!
99.00 = it was under a 100 dollars!

HTH.

As to the original question, as a student, I've always paid rounded prices for classes and equipment/gi's.

 

[Tez3]

It happens here too, £19.99 under 20 quid etc. We don't do that, it's too hard finding pennies for change these days and as we are in Yorkshire they insist on getting their penny change lol.

 

[goingd]

I was just always taught that it's a little dishonest (not that I expect everyone to). Though it really is up to the buyer to recognize the difference - but most don't. So I was curious about who practices it in the martial arts industry.

 

[jamz]

No, my school is pretty straightforward... $20 for the intro, and monthly costs are $60, $80, or $100. No x.99 nonsense.

 

[Ken Morgan]

My Sensei's stuff is just a straight $20, $25 or whatever. http://sdksupplies.com/

 

[ACJ]

Actually it was less to with the psychological ramifications of the price. It actually is based off making sure each transaction needed to go through the cash register to stop employees pocketing exact cash when they didn't need to give any change. That's where its basis is, so don't think of it as a dishonest consumer trick, think of it as a catching dishonest employee trick.

 

[granfire]

Actually it was less to with the psychological ramifications of the price. It actually is based off making sure each transaction needed to go through the cash register to stop employees pocketing exact cash when they didn't need to give any change. That's where its basis is, so don't think of it as a dishonest consumer trick, think of it as a catching dishonest employee trick.

Interesting, I have not heard that before.

 

[Jade Tigress]

Actually it was less to with the psychological ramifications of the price. It actually is based off making sure each transaction needed to go through the cash register to stop employees pocketing exact cash when they didn't need to give any change. That's where its basis is, so don't think of it as a dishonest consumer trick, think of it as a catching dishonest employee trick.

I haven't heard this either.

Psychological pricing or price ending is a marketing practice based on the theory that certain prices have a psychological impact. The retail prices are often expressed as "odd prices": a little less than a round number, e.g. $19.99 or £6.95 (but not necessarily mathematically odd, it could also be 2.98). The theory is this drives demand greater than would be expected if consumers were perfectly rational. Psychological pricing is one cause of price points.

More.

And:

Dear Cecil:
Why do prices end in .99? My father says it started at Bill's Texaco in Waco, Texas during a price war. I say it's a much older management technique to force employees to open cash register drawers for each transaction (making simply pocketing a bill more obvious). Since we're both inveterate ********ters we've decided to leave it to you.
— Richard H., San Francisco

So what's the real explanation? Having spent two hours poring over the microfilm--no guarantee that I'm not full of BS, but at least it's scientific BS--I'd say it was retail price competition in the 1880s. Advertising prices in the newspapers was rare before 1880 but common after 1890. At first prices were usually rounded off to the nickel, dime, or dollar, but it wasn't long before a few smaller operators looking for an edge began using what might be called "just under" pricing (49 cents, $1.95, and so on), no doubt in an effort to convince the gullible they were getting a bargain.

Article.

In any case, it can serve 2 purposes, but I still believe it's used more as a marketing ploy than an employee theft deterrent.

One more from Science News:

Have you ever wondered why prices do not often end in simple round numbers? Decades of research have focused on the issue of pricing and a new study published in the June 2005 issue of the Journal of Consumer Research analyzes how consumers perceive the difference between prices ending in .00 or .99. This study which focuses on the left digit, rather than cents, finds that the difference can be important to consumers.

 

[ACJ]

I clearly remember reading a well written history on the price ending origins, and it was quite clear that the most likely origin for it was in fact theft deterrent. It may have evolved into a psychological tool for marketing, but I won't be swayed by Cecil as to its origins.

I would also avoid quoting a Wikipedia article for evidence. While a useful tool for finding good sources, one that doesn't cite sources for most of it's claims, and only has a link to the other article you quoted.

 

[Jade Tigress]

I clearly remember reading a well written history on the price ending origins, and it was quite clear that the most likely origin for it was in fact theft deterrent. It may have evolved into a psychological tool for marketing, but I won't be swayed by Cecil as to its origins.

I would also avoid quoting a Wikipedia article for evidence. While a useful tool for finding good sources, one that doesn't cite sources for most of it's claims, and only has a link to the other article you quoted.

I think Science News would be a pretty credible source. In any case, you can do a web search and find TONS of info all supporting the marketing theme. As I said, while I do believe it can have a two-fold purpose, and I agree with you on the employee theft aspect, I just don't think it's number one, or originating purpose, is/was to deter employee theft. I'm not saying it can't be useful for that, just not the primary purpose.

Here's one more from physorg.com it's source being the University of Chicago Press Journals.

 

[ACJ]

Again that doesn't talk about the origin. I'm not arguing the psychological ramifications of the slightly lower price, nor it being the major factor of it being a popular tactic. But of its origin.

 

[Jade Tigress]

Again that doesn't talk about the origin. I'm not arguing the psychological ramifications of the slightly lower price, nor it being the major factor of it being a popular tactic. But of its origin.

I was talking about origin too. But no need to go round and round on this. It doesn't really matter how it originated pertaining to the OP's question.

 

[Daniel Sullivan]

We use rounded numbers for everything.

I do not feel that it says anything about a school one way or another if they use .99 instead of a rounded amount. I am more concerned with the product, not the clever pricing.

At this point, the practice has been around so long that people are just used to it. I cannot even call it clever at this point.

Daniel

 

[granfire]

in our school the prices for services are on the rounded dollar, but gear has really odd price endings. Simply the price plus sales tax. I am much more for setting the price and taking the tax out from that.

 

[punisher73]

There has been research on the whole .99 thing that it is supposed to attract consumers etc.

I doubt the whole making costumers making change thing. You pump gas at a preset amount anyways. You pump $20 in gas, I give you a $20 I don't need to open up the drawer anyways. LOTS of holes in that theory right off the bat.

The most reliabe ORIGINAL source had to do with advertising in the late 1890's. Prices usually were at a whole number, $5, $20 etc. When newspapers became more widespread and more people advertised it, they stated to "undersell" their competitors by selling the same product for $4.99 instead of $5.00. The research was based on this idea to see if it held true or not.

 

[ngokfei]

I used to manage a Gap store and was told that the pricing was indeed a "theft Deterent".

Generally if our registers were short a little it wasn't a big deal, but if the register was 'heavy" then there was a problem - employee theft.

the 99 thing has slowly been changed to the 95. Not sure why probably does also signifiy a psychological savings on the part of the consumer. Anyhow it has a nice ring to it.

 

[Ken Morgan]

Well as someone who was self-employed for a time, many of your employees will steal from you regardless of what price you set.

 

[Bones]

Origin? Who knows.

I will say years ago I was selling my motorcycle for say $7,000.00 and put the ad in cycle trader. I must have gotten ONE call. I repriced it to something silly like $6,990.00 and got 10 - 20 calls and was paid not by check, etc., but cash. A silly experiment but interesting results.