Hacker News Reader

Comment by a_c | Hacker News Reader

Actually what the motivation in having price point ending in .99? Why can't I simply price my app at, for instance, 10? I understand there is a pricing psychology in play and I faintly remember it has something to do with accounting but I can't recall the specifics. Can anyone shed some insight?

View on HN

In addition to the other replies (which I agree with) about the psychological aspects, another aspect historically is that avoiding round numbers meant that change had to be given when making a purchase.

I.e. if you bought something that cost $5 you could just hand the $5 to the cashier and they could just avoid ringing you up and pocket the money. In contrast if the object cost $4.99 or $4.95 say they would have to ring it up in the till so they could open it to provide change to the customer.

Another story: a newspaper seller - whose newspaper cost 1 penny - encouraged .99 price points to increase the number of pennies in pockets.

I heard this on Tom Scott's Podcast "Lateral" recently.

> Why can't I simply price my app at, for instance, 10?

The article says you can. It's one of the "supported conventions".

My bad, completely missed the second table. Thanks for pointing it out!

The psychology is (allegedly) simple. When you see a price like $4.99, unless you're pre-conditioned, you are expected to read it as FOUR-99, essentially $4, even though it's $5 for all practical purposes. Often it is styled as $4.⁹⁹ to double down on this effect.

This looks silly, and many people, including me, have taught themselves to recognize this pattern and round the price correctly without a mental effort.

Some people, of course, fall for it; I suppose younger kids are heavily affected.

How can it be that anyone in the world falls for this anymore? My daughter recognized this obvious pattern when she was 7 years old: "It's $5, dad, why don't they just say $5?" I wonder if pricing something at $4.99 have anything more than a vague subliminal effect these days?

Everyone is absolutely consciously aware of it, and this has always been true. It still works just fine via your subconscious.

Imagine two apps you’re scrolling by in the App Store. One is $5, the other is $4.99. Barely going attention (essentially picking subconsciously rather than consciously), you choose one to click first. What are the odds you clicked the $4.99 one?

Zero

Part of it is that people want to be tricked. If I want to buy something but I'm on the fence about whether it's worth $5 then I think the $4.99 price works as like a semi-subconscious plausible deniability mechanism to let me allow myself to buy it.

And then there are gas stations, infamous for taking it another step and including another tenth of a penny.

Only American gas stations. They go so far as to have the 9/10 of a cent fraction as a permanent part of the sign.

The majority of New Zealand petrol stations display the fractional cent too. Same in Australia from memory.

Oh I didn't know that. They don't do this is Canada. Fuel here is priced to the tenth of a cent (192.5 cents per litre), but it's not fixed to 9/10.

Oh - I misread the comment. It's not fixed - they're all digital.

Apologies.

French stations too, they’ve introduced the 1.779€ a liter pricing a dozen years ago, so, 4 significant numbers. On a 100€ refill, it’s 10 cents, ie a drop.

Is it always 9/10 of a cent though, or does it vary?

I am old enough that when I was a kid in the UK there was still such a thing as a halfpenny (pronounced: ha'penny). Although please note: I am not that old; this was ½p - half a 'new penny', i.e. 1/200 of a pound sterling, and not to be confused with the old ½d, half of an old penny, which was 1/480 of a pound (or two farthings). Predecimal currency was well before my time. By over half a decade, in fact. But anyway, point is: of course this meant that some things were priced to end with £0.99½p. The rules are universal.

Just to add a data point about the pronunciation; the way you've written it leads me to read it as "har-penny", which I imagine is valid, however we pronounced it in my family as "hay-penny".

Sorry, that is indeed the intended pronunciation. In fact even briefer than that: more hayp’ny.

Just wanted to really get across that most importantly, the l and f are definitely both silent.

It's been so long I had completely forgotten about that extra contraction.

Reminds me of one of my favourite coins I had in my possession as a child, a "thrup'ny bit"!

For the uninitiated this was a pre-decimalisation three pence coin.

Reply on news.ycombinator.com