This question comes up every time I give my talk about Pricing for Profit.
It always revolves around the concept of using 99 cents at the end of the price. Marking things $19.99 instead of $20.00. Most everyone sitting in the presentation automatically assumes that everyone knows both are virtually the same price. People are not that easily fooled.
So next time I give this presentation I am going to ask them “What is the price of gas?”
Then I will show them this picture…
Yes, we are that easily fooled. You thought $3.95 just like I did.
Don’t fight it. Use it. The smart retailers already are (and, no, JC Penney is not one of them).
PS Apparently pricing is a hot topic for retailers. Bob Phibbs and Rick Segal, two of the top retail consultants around are also talking about price. They both are telling you why. I’m telling you how.