Why don’t we get upset by deceptive strategies like £99.99?

Last updated on February 8, 2018

Before moving forward, we need to ask ourselves – are psychological pricing strategies really deceptive? because at the end we get to keep £0.01 instead of giving it away.

Actually, it is not deceptive, but rather a very transparent form of manipulation that is universally accepted by most of us. But the main question is why do we accept it?

Now let’s cover the three main reasons why we still embrace the 9-ending prices over the rounded up ones.

The Bargain effect

Just take a moment to imagine that all prices would be rounded up. Wouldn’t you feel that you are not paying a fair price? Wouldn’t you feel that they didn’t give you the best offer? And wouldn’t you then feel the urge to negotiate?

If the price is set at £10, a surprising number of people will always think “this should have been £8.50, they’ve rounded up the price!”.

Perhaps the most interesting effect of the 9-ending prices is that it reduces the number of complaints about “why don’t you price it lower?” by enough to outweighs the decreasing margins. It basically seems to stop us speculating on how much lower a non-rounded price could be.

Do we really care about the actual £0.01?

The truth is that we sometimes do, but not in the way you would think. It is mostly when we attempt to rationalize our decision when facing uncertainty in our decision making. As we know, most of our decisions are not rational but emotional.

While shopping for something and making one of those emotional buying decisions, this can very well be one of the extra reasons that make us buy that product from that particular store.

In essence, we do care about the actual amount but only because we really want that product anyway.

Do £9.99 looks more like a £9 than a £10?

It does indeed because as a consumer, we are set to prefer one digit prices over 2 digit ones and so on. This is definitely not the most powerful leverage that this technique has, but it certainly taps into our emotional buying decision and cannot be simply ignored and classified as an urban myth.

But this technique gets even more powerful at petrol stations for example, where the final payment really depends on the amount of fuel that you buy. You multiply 0.01 with 50 liters and notice that you save £0.50. You start to like the 9-ending prices. Then you go inside and see a really cool air refresher at £9.99. Doesn’t seem much, does it?

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