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Comment by throwaway13337 | Hacker News Reader

I never like thinking of pricing in this way. When you price something as $9.99, you're signaling to your customer that you're trying to manipulate them. Whereas a flat $10 is honest.

Integrity means a lot. The software I sell is priced in whole numbers.

However, the magnitude of effect claimed in the article is huge. It's the difference between selling at cost and a huge margin. Between doing well and shutting down your business.

Given the replication crisis is worst in these types of studies - the kinds of studies that beg to be the subject of TED talks - you have to wonder how reproducible these effects are.

Are we selling our integrity for bad science?

https://en.wikipedia.org/wiki/Replication_crisis

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Retailers don't do this because of published studies. They do it because they've tested it internally for the last 40 years.

That may be true but we don't know that it is true.

When I started my selling software, I priced with something.99 too. I did this because everyone else did. I was unfamiliar with these sorts of things so I followed on.

I am sure that in some business at some point, there was a big positive in switching to that sort of pricing.

When I switched my software to whole numbers, I did not notice a drop in sales. Things continued to grow. Of course, my business is one data point and a small one.

How much of why we tend to do this is because, historically or normally, that is how we've seen it done?

what sort of software were you selling? Was it an app that is priced under 10 bucks? That would be very different from some enterprise software costing $500.

Because you are selling software and your target audience are either business, enterprise or computer engineers.

The trial of whole number pricing keeps coming up in Consumer and Retail every 10- 15 years and EVERY time the test shows .99 works. Despite how most of us and even my younger self hated it.

Indeed, marketers aren't stupid (but it turns out people in general are stupid, enough to fall for this trick and many others).

When it is so well known, at some point it isn’t a “trick” anymore, right?

It isn’t as if retailers can fight reality.

Or that they can “come clean” by putting fine print under prices explaining why they are ending prices in 9. Which would create a major distraction messing with any sale.

It is just real-world reliable wackiness that both sellers and purchasers should be aware of.

There is no purely objective way to relate to selling and purchasing prices. Short of very simple scenarios where a spreadsheet actually captured all the real criteria.

Many products make people happier if the price is higher. Is that happiness bump a fraud, or the point?

Just remember to ask for $199,999.99 salary in your next interview!

> Or that they can “come clean” by putting fine print under prices explaining why they are ending prices in 9. Which would create a major distraction messing with any sale.

Why would they do that? That might lessen their sales if people knew of the effect, as a nocebo.

I agree(d).

> Which would create a major distraction messing with any sale.

As you consider the issue this phrase I think is the best synopsis of your thoughts: When it is so well known, at some point it isn’t a “trick” anymore, right

And yet we fall for the same tricks again and again. The most politically pressing? The number of people - internationally - who believe in a strongman leader.

MLMs also occur to me. We know MLMs so well that we've literally written laws against them. There are movies, articles, conversations. And yet, every single year, tons of people fall for them.

What other very well-known tricks do people fall for HN?

FOMO (invite only), trial periods, and decoy pricing are a few tricks I've fallen for in the past. I try to be vigilant, but sometimes it's just too much.

That’s pretty ingenious to call people dumb. This is psychology and these tricks work on you even if you trivially understand that 3.99 is not feasibly cheaper than 4.00 — your brain simply processes information non-stop in the background and you are affected by this. Hell, there was even a study that people who claim they don’t fall for these kind of marketings tricks are more susceptible to fall for this, so, take what you want from it.

Also, even knowingly false propaganda has an effect on you.

Ingenious? Or disingenuous? Regardless, I agree with you, "tricks" and "dumb" was not said derogatorily, I meant basically what you said, that humans are biologically "dumb" in terms of falling for these "tricks," similarly to how optical illusions work. It seems you summarized my point better than I could.

The .99 thing is like the placebo effect.

Both work despite people knowing they exist.

> That may be true but we don't know that it is true

I think a walk through a shopping mall might provide some clear evidence.

It'll provide evidence that they've studied it internally?

I don't think so.

> I don't think so.

OK.

They were being polite because you were flat out wrong: a walk through a shopping centre gives you absolutely zero information about whether prices chosen have been tested or were picked by throwing darts at a calculator. It just tells you what prices those shops have chosen to sell things for, nothing at all about the reasoning behind those prices.

In fact it seems really bad logic to assume that they would all arrive on the same price, had they actually done any real study.

There would be some outliers or weird niche customer populations.

Logic doesn’t explain human actions. And never will.

That's a non sequitor, as I'm not trying to explain human actions at all in this case.

I think their comment is pointless, and would agree with you calling it a non-sequitur, however I feel the need to pedantically point out that when you wrote "... it seems really bad logic to assume that...", that is explaining a human action (assuming).

You literally do.

And the OK response is similarly being nice because if one thinks that the retailers for the past 100 years haven't extensively tested pricing, both in the real world and via simulations, they are naive to a large degree as to how businesses work.

I didn't say that's what I thought, though.

Perhaps not but that's what indymike seems to be implying, anyway.

Because only software engineers developed the ability of higher-thought, every other field is just a bunch of monkeys/NPCs living life.

I usually evade products with such tricks.

The final answer here gives clear indication of psychological bias toward left digits:

https://skeptics.stackexchange.com/questions/2359/the-origin...

I thought it's notorious that sometimes they also don't know what they're doing, being carried by trends and vibes. "Half the money I spend on advertising is wasted; the trouble is I don’t know which half"

The advertiser who knows half his spend is wasted is the one who /does/ know what he's doing.

Yes, that's the point of the quote, but the point of the poster you're replying to is that wasting half your budget would be considered gross incompetence in any other department.

"Half the lines of code I write are useless, I just don't know which half." - an incompetent coder

"Half the time I spend on the phone is wasted, I just don't know which half" - an incompetent salesperson

"Half of my menu is inedible, I just don't know which half" - an incompetent restauranteur

I don't know, you see plenty of people stating they only do X hours of real work in a given day. That sounds an awful lot like the same basic idea.

If I think about it too, half the lines of code being wasted is probably a relatively reasonable measure for writing code. Not because they're actually literally useless, but because you write a lot of scaffolding, a lot of first passes and a lot of code that will be a dead end or superseded before you're done. If you knew before you started exactly what lines of code you'd need to write, you'd be much more efficient, but we don't, so we write a lot of "waste" code too.

> the point of the poster you're replying to is that wasting half your budget would be considered gross incompetence in any other department.

Not if there too a spend of X was required to get the value of X/2.

> "Half the lines of code I write are useless, I just don't know which half." - an incompetent coder

Legacy code in a nutshell. On some blue moon you get a chance to do a clean refsctor, but otherwise business doesn't care if 90% of the code is useless.

Even as the refactorer, you know that refactoring can be anywhere from throwing away simple unused code, to removing a seeming unneeded line and causing a forest fire. I imagine that's the equivalent with advertising (i.e I agree with you).

The "trend" was started in 1920. In the HN typical bourgeois stance, people here are of course immune to cheap tricks like .99 price ; and will reject it as "non-science", a very unscientific way to reject something on the basis of who makes the science.

Sure but should we believe that internal studies at retail chains are quality scientific studies?

Well, it is tested internally for at least 100 years: https://en.wikipedia.org/wiki/Tom%C3%A1%C5%A1_Ba%C5%A5a

And many physicians still recommend putting ice on sprained ankles 5x per day to reduce the “harmful” swelling. Even though the abundance of research now shows icing delays the infiltration of proteins, hormones, and cells that aid in healing processes (and can even cause further tissue damage).

Practices like this stick around because of the desire to be seen making proactive recommendations with putative benefit.

With the dresses there is clearly something odd happening. In all cases except one the cheapest dresses sold the fewest items even compared to ones that were $10 more expensive.

> Even though the abundance of research now shows icing delays the infiltration of proteins, hormones, and cells that aid in healing processes (and can even cause further tissue damage).

Do you mind sharing any references

https://drmirkin.com/fitness/why-ice-delays-recovery.html

When I was looking for evidence about the efficacy of ice to speed recovery, I found it very challenging. I would be grateful if you could share some of the abundance.

The human body (through evolution) only cares about long term effects for the human species.

The actual human might care about pain. Therefore, I don't think that the advice is necessarily bad.

Evolution isn't always our friend. There are many examples where our bodies work against us, only to help us evolve better as a species.

>Practices like this stick around because of the desire to be seen making proactive recommendations with putative benefit

One manifestation of this phenomenon in it's extreme form is cancer diagnosis and treatments. Barring a few exceptions, most cancer treatments are useless.

A lot of cancers can be cured.

Yes, it does appears so to the extent I have explored.

What a thoroughly uninformed and idiotic take. The narcissism of this field is astonishing.

Thank you for calling me uninformed and idiotic.

Yup. It's been settled lore, for retailers, as long as I can remember. I don't think they care about metrics.

That doesn't cheapen metrics, however. Some pretty meaningful (and, often, annoying) stuff has come from them.

Yep it's not science, but engineering

Reminds me of people who tried selling sturdy repairable phones with longer battery life. Even when people complained about battery issues etc. They kept buying the thinnest flagship. Mass markets are mass market.

> Reminds me of people who tried selling sturdy repairable phones with longer battery life.

My brother buys these. They survive up to a year in his "care", rather than the usual 3-4 months of flimsier phones. They all end up with cracked screens within months though.

Almost no mainstream consumer electronics nowadays are meant for people who lead active lives (outside of planned and streamlined activities like going to the gym or running) - because the people as a whole generally don't live active lives. If you happen to be an outlier, making your phone survive becomes a serious logistical issue. Sadly carrying one is a necessity in this day and age.

Another example: Many offroad vehicles/trucks nowadays won't survive days of the advertised use-cases without serious damage and are often utterly unsuited for it (the cybertruck isn't an outlier here). These things are being sold to people who like to play pretend. Manufacturers cross their fingers and hope you don't actually.

Notable exceptions to the rule are things like satellite communicators and some dedicated GPS map devices. They seem to have no issue surviving many phones with their own screens and functionality intact. Their manufacturers know you wouldn't buy them if you didn't plan to use them in the advertised conditions.

Indeed, regarding watercraft have seen it as “you don’t sell the boat you sell the dream”

Get your brother a glass screen protector for his phone. I haven't cracked a phone screen in a decade yet I've gone through many cracked screen protectors.

They're just going to crack right along with the screen. The form factor of modern phones combined with the fact that they're made from materials that will break rather than survive some deformation is a death sentence. These things being in the wrong pocket as you carry something heavy, or merely you sitting on them, will immediately crack their screens and hard plastic in half. The devices are just too big and flat. Any attempt at creating rugged variants usually consists of surrounding those fragile off-the-shelf consumer parts with copious amounts of padding. Now it's even bigger and the added weight is not going to help with surviving drops.

Look at the form factor of something like the Garmin eTrex[1] series and it should be immediately apparent why these devices can outlive about a dozen phones. Sit on it, throw it on the ground, put it in a backpack and throw it down a cliff, they'll be fine. Maybe dented and scratched, but they'll still help you find your way. They're small devices that are very round-ish in every dimension, and they're also pretty light, meaning there's very little energy that needs to be dissipated when they impact something.

Adding padding and protection only helps up to a point. To make smartphones actually durable, you'd need to take away from them. That means little or no glass at all. Use light materials that functionally survive deformation and point contact impacts. Also preferably it would run on AA batteries.

[1] https://bikepacking.com/wp-content/uploads/2021/06/garmin-et...

Phones, besides the functionality, are fashion accessories and bragging chips, and sometimes chiefly so.

I think it was Vertu who first recognized the potential back in early 2000s, The Matrix (1999) made a visual point of it, and since 2007, Apple has been building their entire strategy based on that, with enormous success.

People who need sturdy phones do exist, are few, and they don't brandish them, because these phones are well-beaten.

The people that complained may not have been te ones buying the flagships. At least, I wasn’t.

Although normie friends have commented on why I bought a OnePlus3 instead of something normal like a Samsung.

For me 9.99 is 10. I don't know what they tested, but maybe they shall test again.

That's easy to say, but when it comes to shopping at the store, picking up several items and not actively thinking about it, are you really sure you aren't unconsciously interpreting that 9.99 differently from 10? Personally, I like to think that doesn't work on me, but at the same time I've caught myself saying something was '9 dollars' when I've been distracted and it was in fact 9.99.

And even if 9.99 really is 10 for you, it could mean that you're different than most people, rather than the methodology being faulty.

I found it odd that my girlfriend would say out the cents, because personally I have always been rounding up, and never considered the cents, for example.

I try to keep two things in my head when filling a grocery cart, an accurate tally of dollars and a numberless sense of "where in the dollar the cents remainder is presently", like the position of a progress bar on a screen. I find a remembered visual progress bar does not distract me from the arithmetic, and when I spot one of those silly prices ending in .95 or .99 the bar resets to a tiny bit and I add a dollar. My mental progress bar generally jumps in approximate ~1/4 steps and when the total is accurate to within $2 with many items that is a win.

In 2012, JCPenney launched their "Fair and Square" pricing campaign, which included adopting whole number pricing. This campaign was considered a significant failure and is attributed with causing a 20% decrease in sales.

I don't think we can draw any conclusion from that campaign because multiple variables were changed simultaneously

The biggest ones in my mind, the ones my family had always played: they got rid of the game playing involved in buying during sales windows. This eliminated both the urgency to buy and the fun of feeling you were getting a deal other people weren't (this is all from memory I'm afraid)

Hard to control for this though. How did other department stores do in 2012? I doubt e.g. Sears were putting out great numbers.

The funny unique characteristic of the economic science is that it’s almost the only science without experiments. We can have a multitude of tests and get close to reality, but it’s impossible to reset the initial environment, control variables or test in isolation. You can’t reset people’s minds, so reproducing twice on the same island won’t give the same results, reproducing on two islands won’t either, and reproducing with 3 months delay won’t put you in the same season. Even biology and psychology are much more controllable. It’s definitely a science, but with the same criticism as chess being a sport.

I don't disagree at all with any of what you have to say, but indexing returns to a "category" does go some way toward accounting for e.g. the overall decline of brick-and-mortar retail and malls.

I'm sure this was mostly about people wanting to feel they got a bargain, and being programmed to shop for "50% off" sales.

It seems that perception of value is more important than actual price. In similar vein there have been many cases where sellers have increased sales of an item significantly by increasing the price to make it seem more valuable.

Of course both techniques can be combined.

I think the "no more coupons or discounts" played a huge part in this failure. This whole strategy was something brought in by ex-Apple Retail Store exec "Ron Johnson" when he became CEO in 2011.

My own speculation is that he tried to apply hard-line strategies that work when you have a unique good with strictly-set pricing (Apple products), but fall apart when you're selling goods that people can get anywhere for a variety of prices (e.g. Levi's jeans).

> When you price something as $9.99, you're signaling to your customer that you're trying to manipulate them. Whereas a flat $10 is honest.

JC Penney effect. They do it because it works. And most consumers don't reward honesty with better business. It sucks but at this point it's on the consumer.

And JC Penney was barely more than a decade ago. This phenomenon has been practiced for decades.

>Given the replication crisis is worst in these types of studies - the kinds of studies that beg to be the subject of TED talks - you have to wonder how reproducible these effects are.

Forget the lab tests, there's more than a few other live experiments to study (not just JC Penney, though I'm not sure if they did this even back then).

Yes but it turns out humans don't think critically most of the time.

This is just psychology.

Also everyone is doing this, and that’s a fact. If you do it differently, people will think there’s something wrong

I'm fascinated by these involuntary social protocols. Same as being too honest when everybody is spreading white lies. You end up being the bad one.

I wonder what field studies those.

> When you price something as $9.99, you're signaling to your customer that you're trying to manipulate them. Whereas a flat $10 is honest.

Singalling is honest too, y'know. :)

I wonder if adding a bit of randomness to the lower-order digits would make pricing seem more deliberate than manipulative.

If a product in a store is $9.86, it suggests there’s a reason for the specificity. The same product at $9.99 feels like it’s priced at the maximum they can get away with.

People in stores don’t calculate. People who buy software do. Like actual calculations: $10 / month / user * 100 users

In a store people often don’t even look at the price, just”I see cheese. Oeh, LESS than $3?”

Completely different target group

To me .99 signals that you care for affordability. Luxury products don't care about that.

That's why apple's pricing looks odd to me. Expensive prices minus one dollar

That's not affordability, that's tricking someone into buying something that they wouldn't have otherwise.

If they buy something becsuse it's a penny cheaper, who's really being tricked?

The consumer.

$0.01 doesn't make it affordable, it's just a mind trick. You seem to be aware of this, yet you're defending it.

1. To be frank, I'm not dying on a hill for a penny. A fool and his money...

2. Even if you point it out... What changes. Has anyone ever seriously reconsidered buying a product when you tell them it's $500 instead of $499? What's the harm being done here?

3. What call to action are you suggesting? I'd rather work for laws to include sales tax in US goods' prices than fix this "mind trick".

I can't tell you how to live your life. But those are the reasons I don't really care.

Regarding point 2, it seems strange to ask 'what changes?' when the point of the article you're commenting on is showing how and why you spend more when presented with 9-ending items. If it was found to make consumers spend 8% more, quite a lot changes - and in a time of unprecedented household debt in the US, it seems like tactics contrived to get people to spend more are very much worthy of discussion.

Either way, it's a bit disingenuous to frame it as 'just a penny' (the actual quantity of money being spent isn't the point, it's the effect on people's spending habits) and bringing up some other problem to nullify concerns around this one is just bald-faced whataboutism. You can say you don't really care, and that may be true about addressing the problem, but making arguments for why this isn't actually a problem suggests you care about the topic in a way that compels you to dismiss it, at the very least.

My argument is different. The article is studying the macro situation, my comment focuses on the micro. You can argue an exploitative strategy on the macro, but the individual themselves is still getting a product they are assumedly fine paying for (and there's a big assumption that "people wouldn't buy it otherwise" if priced a cent above) .

The harm on the micro level is negligible, and you can even argue the macro level doesn't fundentally harm society like so many other modern tactics. Environments aren't impacted, liberties are not breached. Children are not exploited. There's no slippery slope towards some gambling addiction. It's not opening a door for hate.

>You can say you don't really care, and that may be true about addressing the problem, but making arguments for why this isn't actually a problem suggests you care about the topic in a way that compels you to dismiss it, at the very least.

It's a discussion, I care about seeing others viewpoints. But I don't feel very challenged here. The questions above are all the things I'd hope to have more viewpoints revealed on when I made my comment up chain. So far it's simply been 2 instances of "why are you defending this?" a question on me instead of a glimpse into you and the GGP.

It's a conversation, not a debate (invoking privation fallacy doesn't exactly change my mindset here. Even if I'd "lose" a formal debate). So I answered that question. I'm "defending this" because it feels trivial but so many are riled up about this. Claiming they won't even participate in purchasing such products. Which is baffling to me.

I More than free to clarify if that's unclear, but I hope I can hear others' viewpoints as well. Because I don't get the big deal outside of in a moral vaccuum. In reality, it's comparatively trivial even if we only focus on how pricing works (e.g. The US sales tax problem).

Fair enough, perhaps I'm bringing some biases into this since I think online discussion has a tendency to be very dismissive of less sensational or impactful topics. I really don't think you're defending the pricing strategy, trivialization of criticism isn't necessarily a defense of the object of criticism, although for how often the two are conflated I could see why you would think that is how your opinions are being seen.

I don't think households need to be spending 8% more of money they don't have (if we're considering rising household debt) when they go out shopping. The issue is probably more evocative than it logically should be for some people because of the aroma of deception around it. Making superficial changes to price to take advantage of human distortions in quantity to get them to spend more has at least a shade of deception to it (I don't say that as a valid argument, just hoping to lend some context for why people would get worked up over it).

If you don't think that's adequate to make it a 'problem'... well, fair enough, I'm not entirely convinced either. But I'm not seeing a very strong case being made for the contrary, besides 'other things are more important' and the interesting claim that consumers must not be impacted because they're still buying these products ("Of course they love their job, wouldn't they quit otherwise?")

Thank you for the thoughtful response.

> Has anyone ever seriously reconsidered buying a product when you tell them it's $500 instead of $499?

The effect seems to be because people subconsciously see the price as $5xx and $4xx. So I would guess yes.

Plenty of stuff worth $3 sold for $9.99

Nobody trying to sell anything "cares for affordability" any more than if it's not affordable to the customer, he won't buy it.

I hope your prices end in 0 and are nice round numbers. There was a time when all the software and info products were whole numbers but ended in 7 for the exact same reason. "$10 is honest and $9.99 is manipulative" is pretty reductive.

I'm doing that these days at the grocery store. If your shit ends in an odd number, I'm assuming it's been shrinkflated. OJ bottle of 1.87 liter? Pass.

What?

Why don't you just look at unit prices instead? That's the only price I ever look at and other than edge cases like trying new things or goods that you can't use up fast enough, there's no reason to look at anything else.

If your store doesn't have them, that's a sign you're at the wrong store and everything is overpriced.

Teach your kids this

PS: Walmart, which has pretty good prices, is famous for odd prices everywhere, so your heuristic would fail. All in all, really, a heuristic like this is a pretty weak way to try to be frugal and I can't recommend it. Just check the unit prices and shop at Aldi. Buy commodity ingredients, not trademarked factory food products. You can't help but spend a fraction of what other folks do when you just buy commodities by the unit price at a store serious about prices.

We don't have unit prices here.

In your whole country? Which one? I'm sad to hear it.

1.87L is 0.5 gal. The product is from the US since half gallon is common size and they didn’t bother changing the size.

There are products in US that are in nice metric sizes and weird US sizes. Like the 2L soda.

Ain't no reason I should have to buy a US product

You know what they say about assuming.

I agree in part. We should have more people checking science like this project: https://en.wikipedia.org/wiki/Reproducibility_Project Overall I feel (and have no proof) that science is under pressure from so many angles. Climate change denial, conspiracy theorists and, as you ask, way more subtle things like overhyping marginal effects.

I mean, given that this pricing is used everywhere by basically every commercial body on Earth, and it is a pretty easily testable hypothesis (like, literally, you need like 30 people at most and a couple of sheets of paper), it’s pretty damn trivial to claim that.. most probably the whole market has done its homework and it is trivially reproducible.

> Integrity means a lot.

Does it? Has anyone priced out the premium integrity can command?

As anecdotally, it doesn’t seem to matter unless you have a sterling reputation. People with merely a good integrity reputation are better off selling it off until they are low ish integrity.

And if you compete on price, may as well abandon it entirely.

Agreed. And a sterling reputation may mean only good at hiding disintegrity.

> Are we selling our integrity for bad science?

Are we selling our inner peace for outrage over minor things?

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