Attention shoppers: beware of the naughty nines

After spending three hours body-checking other shoppers in pursuit of the best prices on a blustery February afternoon, my head’s spinning with numbers — one in particular. When I close my eyes, all I can see are 9s with a leading dot.

Egad! Could a simple, innocent combination of characters be the true source of all my shopping frustration?

The more I think about it, when it comes to the shopping experience, maybe Schoolhouse Rock did call it correctly in 1973 when they introduced us late baby-boomers and Gen-Xers to the “Naughty Number Nine.”

Now is there some mystical reason why merchants can’t just make it simple and price everything to end in zeros (in other words, $2.00 versus $1.99)? Of course there is — in fact, there are several. And they’re all part of something called “psychological pricing.” (Okay, I already see some of you rolling your eyes at another “buzzword”.) Let me assure you, this is no passing fad. Psychological pricing has likely been in play since the first recorded ka-ching. And from its name, you can tell it’s out to get not only our minds, but our money, too.

Psychological pricing (also referred to as “charm pricing,” “price ending,” “fractional pricing” and “odd-even pricing”) contends that customers respond better to certain types of prices. This, of course, makes them more likely to buy items reflecting those prices.

Whether historical fiction or truth, Melville Stone is generally considered to be the father of the .99 price model . As the general manager of the Chicago Daily News in the 1870s (the first “penny paper”), Stone lobbied shopkeepers to price their goods at either 99 or 59 cents, on the hope that the leftover change could be used to buy his Daily News.

So what considerations prevail behind psychological pricing? Plenty, and the logic is all over the board (what — you were expecting this to be simple?). The following are some examples of how the pricing pundits might use the number 9 to their advantage:

9 conditioning.Professor Robert Schindler of the Rutgers Business School studied prices at a women’s clothing store in 2001. He concluded that the one-cent difference between prices ending in .99 and .00 had “a considerable effect on sales,” with prices ending in .99 far outselling those ending in .00. (In the example of $1.99 vs $2.00, clearly the first is cheaper; the .99 suffix becomes a conditioned “trigger” for a better price.)

Under limits.The power of the 9s isn’t limited to smaller-ticket items. Homes selling for $299,000 often sell faster than those costing $300,000. This is because it’s under (barely, but still under) the upper limit of a standard house-selling range, say $250,000-$300,000.

Left-digit effect.The “left-digit effect” (sounds like a movie title) recognizes that the first digit viewed in our left-to-right reading environment is the one that’s retained by the viewer. $7.99? Nah, lemme tell you, you’re really thinking $7. Digit order, it seems, does rule. Vicki Morowitz, president of The Society for Consumer Psychology, says, “We encode it in our minds before we read all the digits.”

Consumers always want to get the best deal at the lowest price. The following study from the Massachusetts Institute of Technology (MIT) and the University of Chicago presents a simple case of the
9s in action
. They created three versions of the same mail order catalog, each containing an identical women’s clothing item, the difference being its listed price in each catalog: $44, $39, and $34, respectively. Guess which one sold more often? The $39 dress (maybe not what you were thinking, eh?). Researchers concluded that shoppers perceived $39 as being a steal for a (perceived) $40 dress, whereas $34 was subconsciously aligned with overpaying for a (again, perceived) $30 dress. It’s all in where the relative round-number price points fall.

So maybe there has been a grassroots effort lurking in support of simplified pricing. With the advent of “dollar stores” (Dollar Store, Dollar General), maybe there is some love out there for “double-oh” after all.

It would be fun to go back in time to the 1870s and share with Stone how his 0.99 model has served as the inspiration for an influential pricing tactic. I’m thinking that if it were up to him, a penny for his thoughts would run you about 9/10ths of a cent.

What do you think of a price ending in .99?

View Results

Loading ... Loading ...
Share this story
Share on Twitter Share on LinkedIn Share on Facebook
About the Author
Peggy White-Davis is a freelance and technical writer who lives in O'Fallon, Missouri. In addition to traveling with her husband, she is not afraid to strike out on her own in search of new and exciting vistas. Peggy is also a published music arranger. When not writing, she volunteers as a biographer for hospice patients in the St. Louis, Missouri area.
Posted in But Why? Tagged , , ,

Underwritten by

This site is underwritten by Cavalry Travel Insurance

Cavalry takes the worry of out travel by providing 24/7 access to medical and security professionals combined with the best medical evacuation and security extraction services. Cavalry gets you home safely when you need it most. Learn more at Cavalrytravelinsurance.com.

This site is underwritten by Sodexo North America

Sodexo North America Sodexo North America is part of a global, Fortune 500 company with a presence in 80 countries. Sodexo is a leading provider of integrated food, facilities management and other services that enhance organizational performance, contribute to local communities and improve quality of life for millions of customers in corporate, education, healthcare, senior living, sports and leisure, government and other environments daily. Learn more at Sodexoinsights.com.

This site is underwritten by Travelex Insurance Services

Travelex Insurance Services is a leading travel insurance provider in the United States with over 55 years combined industry expertise of helping people dream, explore and travel with confidence. We offer comprehensive travel insurance plans with optional upgrades allowing travelers to customize the plans to fit their needs. Compare plans, get a quote and buy online at Travelexinsurance.com.

This site is underwritten by AirHelp

AirHelp is the world’s leading flight delays compensation company, helping passengers apply for compensation following a delayed or canceled flight or when boarding has been denied. It is AirHelp’s mission to fight for passenger rights by holding airlines accountable for flights disruptions that are out of passengers’ control. AirHelp has already helped 5 million people, taking the stress out of applying for compensation and making it as hassle-free as possible for travelers around the world.

This site is underwritten by Allianz Travel Insurance

The Allianz Travel Insurance company has built its reputation on partnering with agents all around the world to provide comprehensive travel insurance for their clients. Contact Allianz Travel Insurance for a comprehensive list of coverage.

This site is underwritten by Chubb

Chubb is the world’s largest publicly traded property and casualty insurance company, and recognized as the premier provider of insurance for successful individuals and families in the U.S. and selected international markets, offering coverage for high-value automobile, homeowners, recreational marine/aviation, valuables and umbrella liability coverage. As an underwriting company, Chubb assesses, assumes and manages risk with insight and discipline, and combines the precision of craftsmanship with decades of experience to conceive, craft and deliver the best insurance coverage and services to individuals, families and business of all size.

This site is underwritten by Enterprise Holdings

A family-owned, world-class portfolio of brands. A global network that spans across more than 85 countries. Some 97,000 dedicated team members sharing common values. And more than 1.9 million vehicles taking our customers wherever they need to go.

This site is underwritten by Fareportal

Fareportal’s portfolio of brands, which include  CheapOair and  OneTravel, are dedicated to helping customers enjoy their trip. Whether you want to call, click, or use one of our travel apps, one thing is clear: We make it easy to take it easy.

This site is underwritten by Insuremyrentalcar.com

An independent provider of low cost CDW/LDW insurance for use with rental cars. Up to $100,000 cover with no deductible. Policies available on a per day, per trip or per year basis. Also works with overseas rentals. Try  Insuremyrentalcar.comnow.

This site is underwritten by InsureMyTrip

It’s simple. InsureMyTrip finds you the right travel insurance plan, every time. InsureMyTrip is the authority on travel insurance. Rated A+ for travel insurance by the Better Business Bureau. All travelers that purchase a policy through  InsureMyTrip have access to Anytime Advocates® for claims assistance.

This site is underwritten by Mediacom Communications

The nation’s fifth-largest cable operator, serving the smaller cities and towns in the Midwest and Southern regions of the United States. We are a high-performance broadband, entertainment, and communications company that brings the power of modern technology and quality customer experience to life inside the connected home by combining ultra-fast gigabit speeds with personalized local and over-the-top entertainment choices that fit your lifestyle. Details at  Mediacomcable.com.

This site is underwritten by SCOTTeVEST

An innovative apparel brand for people who want easy access to everything they need. For those who live for every second, SCOTTeVEST lets you maximize your life. Ditch the carry-on bag and pick up a  SCOTTeVEST.

This site is underwritten by Virtuoso

The leading global network for luxury and experiential travel. This invitation-only organization comprises over 1,000 travel agency locations with 17,500 advisors in over 45 countries, and holds preferred relationships with 1,700 of the world’s finest travel companies. Virtuoso advisors collaborate with their clients to create personalized itineraries featuring exclusive perks, while also providing advice, access, advocacy, and accountability. For more information, visit  Virtuoso.com.

This site is underwritten by VisitorsCoverage

As a company that is constantly striving to simplify travel insurance, VisitorsCoverage, is on a mission to help travelers make the better decisions about purchasing travel insurance, quickly. VisitorsCoverage has helped millions of travelers globally to buy the suitable travel insurance and explore the world with confidence. Get insurance for your next trip at  VisitorsCoverage. Lowest Price Guaranteed.

This site is underwritten by MedjetAssist

Medjet is the premier global air-medical transport, travel security and crisis response membership program for travelers. With a MedjetAssist membership, if you become hospitalized more than 150 miles from home, we will get you from that unfamiliar hospital all the way home to the hospital you trust. All you ever pay is your membership fee. MedjetHorizon members add 24/7 personal security and crisis response benefits. Elliott.org readers enjoy discounted rates. Travel safer with  MedjetAssist.

This site is underwritten by Southwest Airlines

The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth.

This site is underwritten by TravelInsurance.com

TravelInsurance.com makes it fast and easy to compare and buy travel insurance online from top rated providers. Our unbiased comparison engine allows travelers to read reviews, compare pricing and benefits and buy the right policy with a price guarantee, every time. Compare and buy travel insurance now at  TravelInsurance.com.

This site is underwritten by Squaremouth

Squaremouth helps travelers easily and instantly compare travel insurance policies from all major providers. Only companies that meet the strict requirements of Squaremouth’s Zero Complaint Guarantee are available on the website. Compare policies on  Squaremouth.com to save over 70 percent on your next purchase.

This site is underwritten by Travel Leaders Group

Travel Leaders Group is transforming travel through its progressive approach toward each unique travel experience. Travel Leaders Group assists millions of travelers through its leisure, business and network travel operations under a variety of diversified divisions and brands including All Aboard Travel, Andrew Harper Travel, Colletts Travel, Corporate Travel Services, CruCon Cruise Outlet, Cruise Specialists, Nexion, Protravel International, SinglesCruise.com, Travel Leaders Corporate, Travel Leaders Network and Tzell Travel Group, and its merger with ALTOUR. With more than 7,000 agency locations and 52,000 travel advisors, Travel Leaders Group ranks as one of the industry’s largest retail travel agency companies.

This site is underwritten by Travelers United

If you’ve been mistreated by the airlines, Travelers United is your voice in Washington. Join the #1 travel advocacy organization working with Congress to improve and protect travelers. Plus, get $400 of annual benefits you can use for travel for only $29/year. Add your voice to ours. Make travel better.  Join today.