“…the average person treats a price ending in .99 as if it were 15 to 20 cents lower.”
The tendency is called left-digit bias, when the leftmost digit of a number disproportionately influences decision-making. In this case, even though the real difference is only a penny, research shows that, to the average person, $4.99 seems 15 to 20 cents cheaper than $5.00 – which results in selling 3 to 5 percent more units than at a price of $5.00"
Why Literally (Almost) Every Price Ends in 99 Cents
https://en.wikipedia.org/wiki/Psychological_pricing
EDIT: The left-digit bias is not just pennies / cents. It applies when going from $99 to $100…$399 to $400…$999 to $1000 etc.
EDIT 2: If you have a car for sale and you want $10,000 for it are you listing it for $10,000 or $9995?
My favorite is gas is (for example) 2.99 and 9/10ths. Talk about desperately reaching for that left-digit bias.
My brain rounds UP everything to the nearest integer. Pi is 4, joke’s on you.
That sounds a lot like when people say, “I’m not affected by advertising at all”. I am sure the effect has influenced some of the purchases in your life.
And even if you are 100% immune to it my point is about selling items to other people. You’re trying to get other people to buy the item you have for sale. Your brain rounding up does not allow you to take advantage of the well-known left digit bias which affects everyone in the world except you. So, if you round up when you sell an item you lose some advantage.
I’m not shitting on your post, it was very interesting! If / whenever I need to sell a product, I’ll think about it.
Fair enough. Upvoted!
If the scale you are calculating on is big enough pi is 10
It’s a dark pattern. Maybe at one point in time people would be tricked into believing $3.99 was emotionally a lot less than $4 but we’ve grown up with it now for several generations. Everyone knows it costs more anyway because of taxes not being applied until the register. The mistrust is built into the system out of tradition more than anything.
Everyone knows it costs more anyway because of taxes not being applied until the register.
Well, that’s only if you’re in the US.
This trips you up so many times if you visit the US from somewhere else. The number of times I’d see a snack listed for 99c, have a dollar bill on me and then they ask for like $1.12 is higher than I’d like to admit.
If at any point left-digit bias stopped working then merchants would increase the price by a penny or a dollar (when going $99 to $100). Walmart is not going to leave money on the table. It still works.
It still works at scale. If I’m selling a couch on craigslist for $10, I’d have to be a massive butthole to advertise it at $9.99. The fuck am I going to do, give them a penny in change? $10 is $10. I only need to sell it once, and I do not have the patience to deal with someone looking to haggle.
I understand. But what if you’re selling a refrigerator or laptop for $400? You could list it for $399 or $395. The left-digit bias is not just pennies / cents. It applies when going from $99 to $100…$399 to $400…$999 to $1000 etc.
Then I want $400. Like I said, I onlyhave to sell it once. I don’t need to sell it to more than one person.
And if I saw someone selling a refrigerator for $399, personally it would make me doubt their trustworthiness.
The left digit bias is real over large groups of people. You’re going to sell more laptops at $399 because of left digit bias, but it doesn’t make a discernable difference when you’re only selling one. And again, then I have to deal with making change. Somebody’s going to hand me four hundred dollar bills, and I’m going to dig into my pocket for a crumpled single? Or maybe three quarters, two dimes, and a nickel?
I do not have the patience to deal with someone looking to haggle.
Not trying to start a debate with you and I know you’re just talking about a $10 item (and I agree with you on that) but your comment about “not looking to haggle” being the reason you’d use a whole number is not in agreement with another psychological trick.
That’s not a persuasive argument. I’m not interested in haggling. The price is $10. If you see that and think “Oh, I’ll offer $5” then the answer is “no”. We’re sure as shit not going to meet in the middle at $7.50.
Same argument at $400. That’s what I want to get for it, which is why I put that price on it. I don’t want $399 or $250, because life is too short and I’m not that desperate to sell anything. I’d rather give it away for free than haggle with someone over the price. I don’t need to sell it today, and I’m happy to wait for someone who is willing to pay the asking price. I’m not running a pawn shop.
Ending prices with 99 is manipulative. We accept it from businesses because we’re conditioned to, they’re businesses after all! Being manipulated by businesses is just how society operates, part of the environment we live in. But if an individual offers us something for a price ending in 99, we’re much more likely to be suspicious of it.
The article actually explicitly mentions this, and suggests you list things for 25 under instead of 1 under, for example, as it won’t immediately trigger recognition that you’re doing this.
Yeah, if I want to sell something for $400 then I list it at $395 rather than $399.
But then you wouldn’t sell it for 400.
And then I swoop in and list the same thing for $394
Because I have no interest in carrying around coins to make change
Devils advocate but I absolutely list my online prices at $XX.99 because people are more willing to buy from a seller who seems like a legit business instead of a private person. This is also why I make kinda arbitrary prices like $113.99 instead of something like $115 even.
I agree with that strategy. Makes sense.
deleted by creator
EDIT 2: If you have a car for sale and you want $10,000 for it are you listing it for $10,000 or $9995?
which results in selling 3 to 5 percent more units than at a price of $5.00"
Well 5% more units when I have 1 unit to sell is still 1 unit. I’m not getting more money by doing this asshole psych 101 trick. Sooo I’ll stick with being a decent person.
Still 3-5% more possible buyers for your car by the logic I guess. Not that I agree with the system but marketing is fucked.
I don’t really understand the “decent person” comment.
Left-digit bias is a default way that the human brain works.
Humans also tend to like fat, sugar, and salt. So, when you go to a restaurant if they add more butter to a recipe than you would at home are they unethical?
if you have a car for sale and want $10,000 you list it for $12,000 OBO
Since I’m not desperate for money, I won’t do it as a matter of principle. What that principle is exactly, I don’t know…
Honesty? It only works if you succeed in tricking people.
My head went straight to yard sale prices and thought watching someone pull out 99 cents sounds annoying… in the end the psychology makes sense but a flat number cash or card seems more convenient to the average Joe I’m selling to.
It’s not just pennies / cents. It applies when going from $99 to $100…$399 to $400…$999 to $1000 etc.
If you’re selling a car and you want $4000 for it then it’s best to list it for $3999 or $3995. Sure, you’re giving up $1 or $5 but you’re making that price look much more attractive due to the left-digit bias.
If corporations were in actual competition like individuals are, then I’d pass by the one that is nickel and diming me with BS. We only tolerate it because of poor competition.
One of the reasons this originally gained popularity hasnt been mentioned.
Retailers used it as a tool to force employees using cash registers to open the register to give customers their small denomination change. If prices were a flat number its a lot easier for a shop assistant with sticky fingers to just pocket the money if the customer had the exact price.
that sounds apocryphal as fuck. not gonna press you for a source but I don’t buy that for a second.
Some days ago I asked the price for something and the attendant said “fifteen”; but then when it put the price in card reader it was 14.99 🤔
It works differently for me. 9 as a biggest single digit gives of expression of a bigger total number, besides feeling tricked.
Here is an alternative Piped link(s):
Why Literally (Almost) Every Price Ends in 99 Cents
Piped is a privacy-respecting open-source alternative frontend to YouTube.
I’m open-source; check me out at GitHub.
