I have never really believed that offering a product at £9.99 rather than £10.00 causes people to make the decision to purchase. My rationale for this belief is rooted in my own expectation - whenever I buy a product at £9.99 I pay with a £10.00 note and I am not suddenly disappointed when I only get a penny change. The idea presumably is to fool the dim-witted into thinking that the item is really just over £9.00 – which could be called a ‘cheaper than it is’ formula.
Now in Australia they have a more advanced ‘cheaper than it is’ formula. Apparently both 1¢ and 2¢ coins have been out of circulation for years but many items are still priced using the ‘cheaper than it is’ formula. We bought a bottle of wine priced at $7.99 and dutifully waited for our 1¢ change, only to be faced by a curious checkout guy who thought we’d had a mild seizure as we had not moved once he gave us our wine. We were eventually told that all items priced this way are rounded up, so this bizarre system means that the ‘cheaper than it is’ formula expects purchasers to suspend the rounding up reaction when viewing the item but re-instate it when they buy. Alice through the looking glass wouldn’t have believed it either.
