Why do so many prices end with 9?

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Why Do So Many Prices End With 9?

Those price tags are playing tricks on your brain
Why do so many prices end with 9?

istock.com/JaysonPhotography

Walk around any retail space, be it a grocery store, boutique, big-box store or mall, and look at the prices. Very quickly, you’ll notice a pattern: It seems like every single price ends in .99. That cozy sweater is $39.99, those cat toys are $2.99 and chicken breasts are $1.99 a pound. It’s not just you either, according to a 1997 study from the Marketing Bulletin, 60% of retail prices end in 9. So, what’s the deal?

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There’s actually a psychological explanation for this — it’s called the “left-digit effect,” and it works very well at all levels.

According to a study published in the Journal of Consumer Research, nine-ending prices are perceived to be smaller than a price one cent higher when the leftmost digits are different. So, while two items that cost $2.99 and $3 are virtually the same price, seeing a “2” at the front of the first price makes the difference feel more like $1.01 instead of just one cent.

However, the left-digit effect, also called “charm pricing” in retail, is only effective when it’s at a barrier price and the leftmost digit changes. $299.99 and $301 are perceived as vastly different prices while $289.99 and $291 are not, despite both price comparisons having a difference of $1.01.

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A study from MIT noted that nine-ending prices increase demand for a product, but that isn’t the only trick stores play to get you to spend more. Everything from the music played to the free chocolates and coffee provided are there to make you stay longer and impulse shop. And those are only a few of the crazy secrets malls don’t want you to know.