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Actually, the .99 price-point started as a clever way to prevent theft, manage inventory, and keep track of sales. The idea was that pricing something at $1.00

Actually, the .99 price-point started as a clever way to prevent theft, manage inventory, and keep track of sales. The idea was that pricing something at $1.00 might tempt a cashier to pocket the bill, but pricing it at $0.99 meant they’d have to open the register to give change, reducing the risk. Back then, most registers didn’t print receipts. This method also helped with inventory control. For example, if the total sales for the day ended in .56, it meant 44 (or 144) items were sold, no matter how many customers bought them. This pricing strategy stuck around because it was really useful for running a business smoothly.

PullJosh 2y ago
I don’t know if this is true or not, but it’s clever and interesting regardless.
OJFord 2y ago
> This method also helped with inventory control. For example, if the total sales for the day ended in .56, it meant 44 (or 144) items were sold, no matter how many customers bought them. That seems like bollocks, who cares about a technique for tracking total number of any items sold? That isn't helpful for inventory management at all? And even if you had only a single product, or you totalled sales separately for some reason (and inexplicably by sale price rather than just tallying sales), you could then just divide by the price, you don't need to coerce the total into being a tally mod 100.
- johnnyanmac 2y ago
  >who cares about a technique for tracking total number of any items sold? Pre-digital calculator salesmen? Time is money and being able to do a quick mental math can be helpful before doing a more detailed inventory >you could then just divide by the price, you don't need to coerce the total into being a tally mod 100. That's why they gave more than one reason. Why laser focus on criticizing a single one?
  - OJFord 2y ago
    > Pre-digital calculator salesmen? For what purpose? Say you're a salesman of 7 different products/SKUs; you sold 186 products today. What do you do with that information?
    - johnnyanmac 2y ago
      You're still hyper fixating on one single point. And I'm not a businessman. I imagine businesses never do one thing for one reason like software functions. Bankers can tell a lot from a security standpoint based on seemingly frivolous data. Maybe it's the same logic here. If you end every day swelling exactly XX0 products, something is amiss. It at least prompts a deeper investigation, since running through weeks of receipt/data takes more time pre-computer.
      - OJFord 2y ago
        I'm 'hyper fixating' on the point that seemed nonsense to me, that I commented on, and that you replied to.
    - throwaway8195x 2y ago
      I guess you can think of it as a "checksum". If your inventory count doesn't match the sales sum, something is wrong
    - HaZeust 2y ago
      ?? It lets me know how effective a product I'm offering is being sold? What do you mean?
Wowfunhappy 2y ago
> Actually, the .99 price-point started as a clever way to prevent theft, manage inventory, and keep track of sales. The idea was that pricing something at $1.00 might tempt a cashier to pocket the bill, but pricing it at $0.99 meant they’d have to open the register to give change, reducing the risk. Back then, most registers didn’t print receipts. Wouldn't the extra labor required offset any potential savings? (More time per transaction means you need to hire more cashiers to keep checkout line length down.)
- johnnyanmac 2y ago
  It's a small form of security, and we've traditionally traded some convinence and efficiency to mitigate theft.
  - Wowfunhappy 2y ago
    Yes but in this case it's a weak form of security, for a significant efficiency loss. I'm sorry but I don't really believe that most businesses would look at this tradeoff and decide it makes sense.
    - johnnyanmac 2y ago
      We're talking about a pricing scheme conceived in a time right around the birth of the assembly line. And right around the stock market crashed. Everything wasn't about raw profits once upon a time. So a small piece of mind makes sense.
liamwire 2y ago
Seems unlikely, given that the inventory control idea falls apart as soon as you suppose there’s items priced below $0.99.
- johnnyanmac 2y ago
  This would be decades ago, so many useful products would indeed be below 99 cents.
kerkeslager 2y ago
You've obviously never worked in retail of any kind if you think the number of cents at the end of the day is useful for anything. And you're "correcting" an article which has citations, based on what? A story you heard? Citation needed, buddy. Come on.
icedchai 2y ago
I'm skeptical about the theft aspect. Couldn't a dishonest cashier just keep some pennies on-hand and pocket the bill anyway? How is it useful is any of this today? Everyone uses point-of-sale systems and credit cards.
m463 2y ago
There's a lot underneath your comment. For instance, when you buy something and get a receipt - it is not for you the customer. It is to keep the employee honest. If there is no receipt, it might not have been entered into the cash register. Now with electronic payments a lot of this risk has gone away and receipts are becoming optional. Also, I remember some people telling me in their stores, the last digits of a product were secret code. Like ending in .23 (i made this up) meant the product was being discontinued and only stock on hand was available. There were other codes for other things.
- em-bee 2y ago
  in china, businesses are required to use government managed software that will automatically handle taxes and print on government issued receipt paper. for a while the receipt paper included a scratch field where consumers could win something in order to motivate them to demand a receipt. at least once we won more than we spent. some 2digit amount in dollars.
  - miki123211 2y ago
    The government-managed (or at least government-certified) software is not just China, but also large parts of the EU.
    - chrisjj 2y ago
      > government-managed (or at least government-certified Huge difference.
      - em-bee 2y ago
        to be fair, i don't know how much different the chinese management is from a european certification system. we were told to use specific software. and for sure that software is created by some company that may or may not be government owned. i don't know if there was any choice since, as is typical with foreigners, someone will just tell me their recommendation and not try to explain the differences between choices, unless they matter. ie: just go with the default. i did have the impression that different regions use different software at least. i expect that potentially in european countries there are multiple competitors for the same software, but i don't know that either. so for all i know the amount of choice and control in china could be the same as some countries in europe.
Gormo 2y ago
Both of those use cases seem like they'd only work if there were no sales tax to collect.
- sigio 2y ago
  Sane countries (almost everywhere but the US), have sales-tax included in the consumer-listed prices.
  - Gormo 2y ago
    As you point out, sales tax isn't pre-calculated in the US, and yet .99 prices are ubiquitous here.
silverpepsi 2y ago
Was the $.99 price point really invented at a point in history before sales taxes came to be established? Round prices have never been convenient because it always come out to $1.07 1.08 1.09 something like that with a mix of state and local tax added
- simonbarker87 2y ago
  Plenty of places in the world (most/all of Europe at least) include tax in the .99 price. If I go to the check out to buy something that is priced at £9.99, I will pay £9.99 as the 20% is already accounted for.
chrisjj 2y ago
> pricing it at $0.99 meant they’d have to open the register to give change, reducing the risk How does opening register reduce risk?
- tyingq 2y ago
  I think it's more like "have to record the sale and produce a receipt". The customer wants their penny, so you have to ring it up. Now if you steal a dollar, your totals at the end of the day are off a dollar. But, if you take the dollar with no recorded sale, your counts are good.
  - gruez 2y ago
    But OP's comment also says >Back then, most registers didn’t print receipts.
    - tyingq 2y ago
      Registers that keep track of how much should be in the till, based on the day's sales, those have been around quite a long time. NCR got big enough in 1912 that they had antitrust trouble. Their big selling feature was tracking the till. https://www.asc.ohio-state.edu/economics/pdf/marvel/ncr.pdf https://www.asc.ohio-state.edu/economics/pdf/marvel/ncr.pdf
VoodooJuJu 2y ago
Interesting, but not true. Registers that don't record receipts also don't record when it's opened. Even if they did, cashiers could forego opening it and provide their own pennies in order to pocket the 0.99 difference. The .99 pricing is typical black & white smiling mid-atlantic accent gray flannel suit slicked hair over-jovial grinning 50s/60s mad men salesman stuff.
ed 2y ago
this feels apocryphal and appears to be one theory of many[1] (also - just take out an extra penny during the next transaction). to quote cecil adams "trying to find out who invented [psychological pricing] is like trying to find out who invented the hat."[2] 1 - https://en.wikipedia.org/wiki/Psychological_pricing https://en.wikipedia.org/wiki/Psychological_pricing 2 - https://www.straightdope.com/21341889/why-do-prices-end-in-99 https://www.straightdope.com/21341889/why-do-prices-end-in-9...
RavingGoat 2y ago
This does absolutely nothing since the cashier can just have pennys in their pocket.

PullJosh 2y ago

I don’t know if this is true or not, but it’s clever and interesting regardless.

OJFord 2y ago

> This method also helped with inventory control. For example, if the total sales for the day ended in .56, it meant 44 (or 144) items were sold, no matter how many customers bought them. That seems like bollocks, who cares about a technique for tracking total number of any items sold? That isn't helpful for inventory management at all? And even if you had only a single product, or you totalled sales separately for some reason (and inexplicably by sale price rather than just tallying sales), you could then just divide by the price, you don't need to coerce the total into being a tally mod 100.

johnnyanmac 2y ago
>who cares about a technique for tracking total number of any items sold? Pre-digital calculator salesmen? Time is money and being able to do a quick mental math can be helpful before doing a more detailed inventory >you could then just divide by the price, you don't need to coerce the total into being a tally mod 100. That's why they gave more than one reason. Why laser focus on criticizing a single one?
- OJFord 2y ago
  > Pre-digital calculator salesmen? For what purpose? Say you're a salesman of 7 different products/SKUs; you sold 186 products today. What do you do with that information?
  - johnnyanmac 2y ago
    You're still hyper fixating on one single point. And I'm not a businessman. I imagine businesses never do one thing for one reason like software functions. Bankers can tell a lot from a security standpoint based on seemingly frivolous data. Maybe it's the same logic here. If you end every day swelling exactly XX0 products, something is amiss. It at least prompts a deeper investigation, since running through weeks of receipt/data takes more time pre-computer.
    - OJFord 2y ago
      I'm 'hyper fixating' on the point that seemed nonsense to me, that I commented on, and that you replied to.
  - throwaway8195x 2y ago
    I guess you can think of it as a "checksum". If your inventory count doesn't match the sales sum, something is wrong
  - HaZeust 2y ago
    ?? It lets me know how effective a product I'm offering is being sold? What do you mean?

Wowfunhappy 2y ago

> Actually, the .99 price-point started as a clever way to prevent theft, manage inventory, and keep track of sales. The idea was that pricing something at $1.00 might tempt a cashier to pocket the bill, but pricing it at $0.99 meant they’d have to open the register to give change, reducing the risk. Back then, most registers didn’t print receipts. Wouldn't the extra labor required offset any potential savings? (More time per transaction means you need to hire more cashiers to keep checkout line length down.)

johnnyanmac 2y ago
It's a small form of security, and we've traditionally traded some convinence and efficiency to mitigate theft.
- Wowfunhappy 2y ago
  Yes but in this case it's a weak form of security, for a significant efficiency loss. I'm sorry but I don't really believe that most businesses would look at this tradeoff and decide it makes sense.
  - johnnyanmac 2y ago
    We're talking about a pricing scheme conceived in a time right around the birth of the assembly line. And right around the stock market crashed. Everything wasn't about raw profits once upon a time. So a small piece of mind makes sense.

liamwire 2y ago

Seems unlikely, given that the inventory control idea falls apart as soon as you suppose there’s items priced below $0.99.

johnnyanmac 2y ago
This would be decades ago, so many useful products would indeed be below 99 cents.

kerkeslager 2y ago

You've obviously never worked in retail of any kind if you think the number of cents at the end of the day is useful for anything. And you're "correcting" an article which has citations, based on what? A story you heard? Citation needed, buddy. Come on.

icedchai 2y ago

I'm skeptical about the theft aspect. Couldn't a dishonest cashier just keep some pennies on-hand and pocket the bill anyway? How is it useful is any of this today? Everyone uses point-of-sale systems and credit cards.

m463 2y ago

There's a lot underneath your comment. For instance, when you buy something and get a receipt - it is not for you the customer. It is to keep the employee honest. If there is no receipt, it might not have been entered into the cash register. Now with electronic payments a lot of this risk has gone away and receipts are becoming optional. Also, I remember some people telling me in their stores, the last digits of a product were secret code. Like ending in .23 (i made this up) meant the product was being discontinued and only stock on hand was available. There were other codes for other things.

em-bee 2y ago
in china, businesses are required to use government managed software that will automatically handle taxes and print on government issued receipt paper. for a while the receipt paper included a scratch field where consumers could win something in order to motivate them to demand a receipt. at least once we won more than we spent. some 2digit amount in dollars.
- miki123211 2y ago
  The government-managed (or at least government-certified) software is not just China, but also large parts of the EU.
  - chrisjj 2y ago
    > government-managed (or at least government-certified Huge difference.
    - em-bee 2y ago
      to be fair, i don't know how much different the chinese management is from a european certification system. we were told to use specific software. and for sure that software is created by some company that may or may not be government owned. i don't know if there was any choice since, as is typical with foreigners, someone will just tell me their recommendation and not try to explain the differences between choices, unless they matter. ie: just go with the default. i did have the impression that different regions use different software at least. i expect that potentially in european countries there are multiple competitors for the same software, but i don't know that either. so for all i know the amount of choice and control in china could be the same as some countries in europe.

Gormo 2y ago

Both of those use cases seem like they'd only work if there were no sales tax to collect.

sigio 2y ago
Sane countries (almost everywhere but the US), have sales-tax included in the consumer-listed prices.
- Gormo 2y ago
  As you point out, sales tax isn't pre-calculated in the US, and yet .99 prices are ubiquitous here.

silverpepsi 2y ago

Was the $.99 price point really invented at a point in history before sales taxes came to be established? Round prices have never been convenient because it always come out to $1.07 1.08 1.09 something like that with a mix of state and local tax added

simonbarker87 2y ago
Plenty of places in the world (most/all of Europe at least) include tax in the .99 price. If I go to the check out to buy something that is priced at £9.99, I will pay £9.99 as the 20% is already accounted for.

chrisjj 2y ago

> pricing it at $0.99 meant they’d have to open the register to give change, reducing the risk How does opening register reduce risk?

tyingq 2y ago
I think it's more like "have to record the sale and produce a receipt". The customer wants their penny, so you have to ring it up. Now if you steal a dollar, your totals at the end of the day are off a dollar. But, if you take the dollar with no recorded sale, your counts are good.
- gruez 2y ago
  But OP's comment also says >Back then, most registers didn’t print receipts.
  - tyingq 2y ago
    Registers that keep track of how much should be in the till, based on the day's sales, those have been around quite a long time. NCR got big enough in 1912 that they had antitrust trouble. Their big selling feature was tracking the till. https://www.asc.ohio-state.edu/economics/pdf/marvel/ncr.pdf https://www.asc.ohio-state.edu/economics/pdf/marvel/ncr.pdf

VoodooJuJu 2y ago

Interesting, but not true. Registers that don't record receipts also don't record when it's opened. Even if they did, cashiers could forego opening it and provide their own pennies in order to pocket the 0.99 difference. The .99 pricing is typical black & white smiling mid-atlantic accent gray flannel suit slicked hair over-jovial grinning 50s/60s mad men salesman stuff.

ed 2y ago

this feels apocryphal and appears to be one theory of many[1] (also - just take out an extra penny during the next transaction). to quote cecil adams "trying to find out who invented [psychological pricing] is like trying to find out who invented the hat."[2] 1 - https://en.wikipedia.org/wiki/Psychological_pricing https://en.wikipedia.org/wiki/Psychological_pricing 2 - https://www.straightdope.com/21341889/why-do-prices-end-in-99 https://www.straightdope.com/21341889/why-do-prices-end-in-9...

RavingGoat 2y ago

This does absolutely nothing since the cashier can just have pennys in their pocket.