No. of Recommendations: 5
Interesting.
Never heard the “reduce theft” explanation before. I always heard that it was psychological.
Here’s what AI replied to my inquiry:
Prices ending in .99, known as "charm pricing" or "psychological pricing," make items appear significantly cheaper by leveraging the "left-digit bias," where consumers focus on the first digit and perceive $19.99 as closer to $10 than $20. This strategy signals a bargain, increases sales, and reduces the perceived mental effort of purchasing.Makes more sense to me for 3 reasons. Even if an item cost $4.00, there would be sales tax added, so you have to use the cash register. Also, how many people pay with the exact amount? Most people would pay with a larger bill and expect change. Lastly, cashier theft would show up in higher inventory shrinkage, triggering someone to examine what’s happening, even in the good old days.
Here’s a recent Readers Digest article on the subject:
https://www.rd.com/article/why-prices-end-in-99/ 