Just wondering why most items always have "99 cent" on any dollars.

[Smurfboy]

Instead of $1.99, why not $2.00? Instead of $59.99, why not $60.00? Does a penny make any difference? I've always wondered about that, lol. Who came up with "99 cent" idea, anyway?

And yes, I'm an oddball.

 

[Kassen]

Psychologically, $4.99 looks cheaper than $5.00, and it has been statistically proven to influence sales by playing on our subliminal workings. There is your answer!

 

[Dave McFly]

Kassen is correct it makes you think it is closer to 4 dollars instead of closer to 5. when we see that price even if it is only one cent cheaper it looks more so it is how our brains work.

 

[Plainview]

Gas takes it a step further. $3.89 9/10 a gallon. The 9/10 is usually how gas stations make their money.

 

[Intellivision]

The 99 cent factor is psychological as people have stated, though you'd think some people would have the opposite effect as $4.99 has two 9s in it vs a flat $5.00 price.

However, as time goes on, more places are going away from the 95 or 99 cent ending. The biggest being Walmart. Their prices can be all over the place in the cents place.

You'll typically see things rounded off to the dollar on premium products or restaurant menus.

PV: A big driver of gas station profits is the convenience store.

 

[Hammerclaw]

That practice is called "odd pricing" in microeconomics. Firms do that because the 1.99 seems somehow significantly cheaper than 2.00. Studies have shown that consumers do have this illusion. It's also thought the practice arose as a way of somehow making it more difficult for employees to skim from the till, although I can't imagine why.