68. Why Do Prices End in .99? Today we are used to seeing prices like $9.99 or $99.95 instead of neat round numbers such as $10.00 or $100.00. Most people assume this is simply because the amount looks cheaper to the customer.That psychological effect is real, but it is not why the custom began.When this style of pricing first appeared in the late-19th / early-20th century, shopkeepers had a completely different motive. What was the original reason for setting prices just below a round figure? Added 2 November 2010 Show Hint Show Solution Hint: Think about how early mechanical cash registers worked and the problem of employee honesty at the time. Solution: The fractions of a dollar (“. 99,” “. 95,” etc.) were introduced to force the clerk to open the cash register and make change for every sale. If an item had cost an even $1.00, a dishonest employee could simply pocket the bill without ringing it up. By pricing it at 99 cents, the customer would expect at least a penny in change, obliging the clerk to unlock (and therefore record) the transaction on the cash register, whose familiar “ding” was an audible signal to the manager that money was being properly logged. The practice later proved useful for marketing psychology, but its origin was anti-theft bookkeeping.
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