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Comment by digitalPhonix | Hacker News Reader

How? If you price something at $1.03 so that it rounds up to $1.05, someone who buys two will get it rounded down to $2.05

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No the price will become 1.05 and when customer buys 2 it will be 2.10 not 2.05

I prefer if shops do that (or actually the more common €2 instead of the deceptive €1.99 or 1.95), but most shops don't round their prices.

I recall some major US chain (TJ Maxx? JC Penney? Target? Something?) that decided to start pitching some kind of 'honest pricing' scheme, where all their stuff was just rounded up, so instead of $24.99 it would be priced at $25 flat.

A noble goal, but it apparently backfired on them spectacularly because of the same reason why retailers did that in the first place.

It was JC Penney, however they went beyond merely rounding prices. They ditched sales and coupons, which are unfortunately very popular, and that is often cited as the reason the "fair and square" plan failed.

Did they replace the sales and coupons with simply lower prices across the board? Because that would make it more attractive to buy there. If not, it's a price increase.

Yes, but the lower prices across the board were close to the average selling price before, not the best price you used to be able to get using a coupon for an item on sale. Therefore deal hunters no longer wanted to shop there. The price-insensitive folks still did, but they were the ones who used to pay full price and subsidize the deal hunters, and now they were getting a lower price than before. Thus it was a money losing strategy for the company.

If you were already pricing in mils to be competitive, your customers will not accept an increase of 5c "because the country got rid of the penny."

It's basically impossible that your customer was paying you in cash at that point anyways.

> No the price will become 1.05 and when customer buys 2 it will be 2.10 not 2.05

That's quite literaly against the "various rules to try to ensure neither the seller or buyer always benefited" that the previous commenter was talking about writing software to handle.

No country that has cash rounding rules would allow 2*1.03 to be charged $2.10.

https://en.m.wikipedia.org/wiki/Cash_rounding

(Unless you mean: the price of a single item is changed to $1.05, in which case sure; that's the business's perogative to raise prices but it's not taking advantage of the rounding system)

Since sales taxes are added at the time of purchase in North America, none of that ends up mattering because the randomness of someone's shopping cart plus the percentage of sales tax makes it impossible to price your inventory in such a way as to consistently benefit the retailer.

Worth mentioning that despite not having a one-cent denomination, products are still priced in cents - e.g. in Canada you still price something at $2.79 even though we have no pennies. It's only at the payment step, when cash is being used, that anything is rounded off.

I mean, retailers could certainly increase their shelf prices, but if they were going to do that they would do so anyway, and the $X.99 pricing pattern exists for a reason so there's not really anywhere to increase those prices by some small amount that wouldn't put people off anywa.

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