One of my earliest memories is standing in a shop at the age of about four or five, smiling coyly as my mother heaped praise upon me because I had just pointed out that the owners of Toymaster in Taunton were trying to deceive us by selling a My Little Pony for £2.99 instead of £3.
It didn’t change much: I still bought Starry Wings or Moon Jumper or whichever whimsical little piece of equine delight took my fancy that day, but I felt something inside me had changed that day. No longer was I the victim, blindly stumbling into retailers’ traps. I had savvy, I had nouse. I knew.
Fortunately for shop owners across the nation, if new research is anything to go by, other consumers haven’t yet experienced the same revelation.
According to a French study, consumers are more likely to buy an item with a price tag that ends in .99 than they are a whole number. The researchers found that by lowering the price of a pizza by €0.01, they could boost sales by 15%.
‘Consumers ‘put numbers in categories like “under £5” or “under £6” – rather than them representing a value’, says this article on the BBC news website. “Shoppers are aware of what is going on, but don’t respond to it because they don’t think logically about how close numbers are – such at £99.99 and £100,” Dr Jane Price, lecturer in psychology at the University of Glamorgan told the website.
There’s no doubt that as well as being misleading, ending price tags with .99 is irritating to consumers – to such a degree, in fact, that in 2005, a third of shoppers voted to do away with the 1p coin, and instead bring in a new 99p coin. Apparently, we waste £133m in one penny coins every year.
So why do retailers do it? Apparently, it’s so that retailers could be reassured their staff were honest, says Graham from Thailand who commented on this Daily Mail article. If a customer handed the shop assistant a £10 note, the assistant would be forced to ring it through the till to give the customer their change. The BBC, though, has the theory that it was introduced to emphasise the amount an item had been discounted by during sales.
Of course, it could just be that most consumers take a ‘look after the pennies’ attitude to their shopping – particularly in the current climate. “We are seeing fuel prices going up and down by 0.01p,” Nick Gladding of Verdict Research told the BBC. “It is tiny amounts of money, but people want to hear about it.”
