Why Things Cost $19.95

Bill Bryson points out (can't remember which book) that pricing something just below a round figure (eg 0.99 or 4.99) would force shop assistants to ring up the purchase in most cases where they'd be given a dollar or a five dollar bill, rather than just pocketing the cash. So initially, it was a way to enforce honesty on employees, and the other benefits became apparent later.

I think the natural defense to forced precision calculations is to simply round everything up (never down). If it's $19.35, you round up to $20. In fact, I've even gotten to the place where I really only use the most significant digit, rounded up, in my rough-cut financial judgments. If I see a car priced $14,000, my subconscious says to itself "I would never spend $20,000 on a car!". It doesn't always work, and there is a time to be more precise, but this sort of order-of-magnitude internal bartering with myself helps keep my more compulsive self in check.

interesting, many good restaurants charge full dollar menu. Like 7, 9, 11. You never see something like 8.99 unless it is a chain.<p>Maybe b/c, they realise their clientele is: 1. Smart enough to do the rounding up themselves. 2. Want to look more sophisticated by showing they are not using cheap tricks to nickel and dime customers.

This is the kinda research that walmart bases their whole business on. If you even notice that every item in walmart is 12.37, 17.46 or something to that effect. That gives people that impression that the price is set as low as possible. when in fact it's just made to appear so.<p>fyi: i hate walmart, go target

The article is very interesting on the psychology of how it works and anecdotally I would completely agree with the findings.<p>However, the title is putting the cart before the horse. Just because people respond to things this way, it is not the cause of the tradition.<p>The best researched article I could find (that matches a story from an old book I once had) about the origins of the $.99 can be found here <a href="http://www.straightdope.com/classics/a3_166.html" rel="nofollow">http://www.straightdope.com/classics/a3_166.html</a>

Turns out most people are statically typed.

There's a self-service laundromat I go to, and the have you charge up a reusable swipe card.<p>The card machine takes 1's, fives, and so on; bills, no coins, but the machines themselves cost oddball amounts.<p>The big-load washer was something like $5.63, and the drier was $0.69 for 15 minutes.