8 ms·

This isn't the first time where I've read that someone doesn't understand why prices end in .99 and I'm surprised no one seems to know though someone in the com

This isn't the first time where I've read that someone doesn't understand why prices end in .99 and I'm surprised no one seems to know though someone in the comments in the article came close. I've owned restaurants for 30 years. When I first got into the business, I was told to always end our prices in "9" because when you add up the prices of items you sold, it should always end as ..... And that is where I, too, have forgotten. It was an accounting thing as mentioned in the comments. Should be easy to Google or look up. I don't know if anyone does it for that reason anymore. We certainly don't. I'll leave looking that up as an exercise to the reader.

deleted 12y ago
[deleted]
xxxyy 12y ago
Unless you are talking about the embezzlement issue - i.e. employees pocketing single bills paid by the customers, which may get harder when you actually have to give back the change - your exercise has greatly outran my capabilities.
- celticninja 12y ago
  it was considered slightly more difficult for employees to add up prices ending in .99 accurately, therefore making it more difficult to steal by taking the money and not entering it in the till.
  - logfromblammo 12y ago
    If that were the case, I'd price everything ending in .73 .
    - celticninja 12y ago
      Or any huge number of variations, the more the better because people can learn patterns very easily.
ptaipale 12y ago
I don't know if this is a useful exercise, but the main reason is psychological pricing [0]. If you say that all prices should end in .99 due to some other reason than having the customers perceive the prices as lower, one possibility is that if all prices really end in .99 with no exceptions, then you can do a check on the number of items delivered based on the cent digits of total price: "the sum is $82.91 - were there nine dishes sold?" [0] http://en.wikipedia.org/wiki/Psychological_pricing http://en.wikipedia.org/wiki/Psychological_pricing
- k1t 12y ago
  Although, in the UK some big chains moved away [0] from the .99 prices because everybody knows that it's just a marketing trick and having round numbers seems more 'honest'. That was a few years ago, maybe they've gone back to it since... [0] http://news.bbc.co.uk/2/hi/uk_news/magazine/8159072.stm http://news.bbc.co.uk/2/hi/uk_news/magazine/8159072.stm
  - ptaipale 12y ago
    I suppose the .99 psychological pricing works as good as ever (UK and elsewhere). A somewhat silly angle to this is that while most items are sold with prices in euros and cents, over here automobile fuels are sold with three digits after the euro in the price. I.e. a litre of petrol/gas is 1.399€, not 1.39€. The third nine is generally shown smaller in the price ads. With the volumes of trade being large and margins small, this makes a lot of difference to gas station chains. This is even more funny because elsewhere even the euro cent is too small. We don't use euro cent coins here; the rationale by government was to reduce the cost of handling small coins. Thus all shopping is rounded to the nearest 5 cents, and this also applies to credit/debit card payments.
learnstats2 12y ago
If .99 is used consistently, the distance to the nearest whole number tells you how many items were sold, which is useful as double-check (also subconsciously). 39.94 = 6 items
- nostromo 12y ago
  But if this was the reasoning ending in .01 would surely make more sense. 39.06 = 6 items 79.59 = 59 items
  - learnstats2 12y ago
    Change giving becomes much more difficult.
    - logfromblammo 12y ago
      Just apply a $0.01 discount at the register for customers paying in cash. Your total is $34.06, with a $0.06 discount. Your change is a $1 and a $5 from $40. Thank you, come again. A $0.01 discount is a lot easier to swallow than an additional $0.01 change-making fee on each item.
      - sparkie 12y ago
        The arithmetic would be too much for a large number of tillers, who can't do much more math than count change. This still misses the other main purpose of the .99p, which was to force the tiller to open the till to get the change (thus, reducing the likelihood that they might just pocket the money handed to them).

deleted 12y ago

[deleted]

xxxyy 12y ago

Unless you are talking about the embezzlement issue - i.e. employees pocketing single bills paid by the customers, which may get harder when you actually have to give back the change - your exercise has greatly outran my capabilities.

celticninja 12y ago
it was considered slightly more difficult for employees to add up prices ending in .99 accurately, therefore making it more difficult to steal by taking the money and not entering it in the till.
- logfromblammo 12y ago
  If that were the case, I'd price everything ending in .73 .
  - celticninja 12y ago
    Or any huge number of variations, the more the better because people can learn patterns very easily.

ptaipale 12y ago

I don't know if this is a useful exercise, but the main reason is psychological pricing [0]. If you say that all prices should end in .99 due to some other reason than having the customers perceive the prices as lower, one possibility is that if all prices really end in .99 with no exceptions, then you can do a check on the number of items delivered based on the cent digits of total price: "the sum is $82.91 - were there nine dishes sold?" [0] http://en.wikipedia.org/wiki/Psychological_pricing http://en.wikipedia.org/wiki/Psychological_pricing

k1t 12y ago
Although, in the UK some big chains moved away [0] from the .99 prices because everybody knows that it's just a marketing trick and having round numbers seems more 'honest'. That was a few years ago, maybe they've gone back to it since... [0] http://news.bbc.co.uk/2/hi/uk_news/magazine/8159072.stm http://news.bbc.co.uk/2/hi/uk_news/magazine/8159072.stm
- ptaipale 12y ago
  I suppose the .99 psychological pricing works as good as ever (UK and elsewhere). A somewhat silly angle to this is that while most items are sold with prices in euros and cents, over here automobile fuels are sold with three digits after the euro in the price. I.e. a litre of petrol/gas is 1.399€, not 1.39€. The third nine is generally shown smaller in the price ads. With the volumes of trade being large and margins small, this makes a lot of difference to gas station chains. This is even more funny because elsewhere even the euro cent is too small. We don't use euro cent coins here; the rationale by government was to reduce the cost of handling small coins. Thus all shopping is rounded to the nearest 5 cents, and this also applies to credit/debit card payments.

learnstats2 12y ago

If .99 is used consistently, the distance to the nearest whole number tells you how many items were sold, which is useful as double-check (also subconsciously). 39.94 = 6 items

nostromo 12y ago
But if this was the reasoning ending in .01 would surely make more sense. 39.06 = 6 items 79.59 = 59 items
- learnstats2 12y ago
  Change giving becomes much more difficult.
  - logfromblammo 12y ago
    Just apply a $0.01 discount at the register for customers paying in cash. Your total is $34.06, with a $0.06 discount. Your change is a $1 and a $5 from $40. Thank you, come again. A $0.01 discount is a lot easier to swallow than an additional $0.01 change-making fee on each item.
    - sparkie 12y ago
      The arithmetic would be too much for a large number of tillers, who can't do much more math than count change. This still misses the other main purpose of the .99p, which was to force the tiller to open the till to get the change (thus, reducing the likelihood that they might just pocket the money handed to them).