Readers here know I’m a big fan of advice columns in general, and of Heloise in particular. In a recent Heloise column, 13-year-old Jenna D. asked “Why are items priced at $4.99 instead of $5?”
Heloise had a good answer: “It’s based on the fact that we read [prices] from right to left. Your brain perceives the number 4 as less than 5, which it is. So we’re thinkin’ we’re getting a heck of a deal!“ God, I love Heloise. It’s like hearing from Marge Gunderson.
I’ve heard another good reason for pricing goods this way: it’s to reduce employee theft. Ever since the invention of the cash register, store owners have known that on even-dollar items, cashiers would sometimes slip the cash into their own pocket instead of ringing it up.
In the late 1800s, a manager at Sears Roebuck, or maybe Montgomery Ward depending on who you believe, came up with the idea of reducing even-dollar prices by one cent as a way to force cashiers to open the register to give change on every sale. This created a record of the sale, rang a bell to announce it, and got the cash into the proper hands.
Wikipedia article Psychological pricing gives us several other good reasons for this sometimes annoying pricing practice.
Below, the book’s title says it all – it’s a history of the cash register.
