Why Does Your Book Price End In 99?

book price

Whether illusory cost-savings or to thwart employee theft, the strange practice of ending product prices in “99” is a relic from the 1880s.

You would think it would be a lot simpler for both retailers and consumers if the price of that $29.95 book were instead a nice, round $30. There must be a good reason why the prices of so many products end in 95 or 99. But what is it?

Mind games

Two theories stand out. One suggests a ploy to manipulate the customer into purchasing the goods, the thought being that a $29.95 price point seems more palatable than one of $30 (though sales tax will invariably bring the total to $30 and change, anyway). The theory seems plausible, even if it does not place much value on our intelligence.

The practice of ending prices in 95 or 99 began in the late 1880s, when newspapers started carrying more advertisements that included prices, says Scot Morris, a self-described collector of strange facts and useless information. By advertising an item at 99¢ instead of a dollar, a store could undercut its competition and, theoretically, gain customers. This practice would not cost the store much money, and customers would feel like they were saving money. Everyone would be happy.

Theft prevention?

A second theory focuses on a big problem in the retail business: employee theft. According to this explanation, if an item’s price were a round number, it makes it easier for an employee who is handling the cash register to pocket the money handed over by a customer.

The customer is more likely to have the exact amount if the cost is an even $30, which means the clerk would not have to open the register to provide change and can simply slip the money into his or her pocket. No record of the transaction exists, and the clerk can simply claim that the item was stolen if the issue arises. If a product costs $29.95, on the other hand, the employee probably will have to open the register to make change and a record of the transaction will be created.

The loss-prevention theory might have once made sense, but it is less solid today, considering the widespread use of credit and debit cards, not to mention sales tax and online sales. So, we are left with the notion that consumers perceive a bigger difference between $29.95 and $30 than actually exists.

It’s on sale!

Robert Schindler, a marketing professor at Rutgers University, relates this to the impression that a price ending in 95 or 99 indicates a discount. He also cites the tendency of consumers to give diminished attention to right-most digits in a price, adding to the perception that the book you’re buying is a full dollar less that what you’re really paying.

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1 COMMENT

  1. MY FATHER WAS BORN IN 1902 AND WORKED AT PENNYS AT AGE TEN. HE TOLD US THAT J C PENNYS BEGAN THAT ONE CENT OFF TO UNDERCUT THE PRICES OF NEWSPAPER ADS AT THE TIME HE WAS THERE.

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