There must be a reason for it . . .

Ninety-nine triumphs in U.S. retailing

Conrad Weisert
December 16, 2013 (Beethoven's birthday)
© 2013 Information Disciplines, Inc.


Christmas Gift Catalogs

Our mailboxes are filled with brochures and catalogs pushing Christmas gifts. The Sunday newspapers are also loaded with colorful inserts. Yesterday's Chicago Tribune contained dozens of those advertising suplements. Here are the product prices shown in three of them:

A major appliance/TV chain
(cover page)
A low-end furniture store
(just page one)
A leading telephone company
(the whole brochure)
$189.99
$469.99
$299.99
$49.99
$799.99
$999.99
$7.99
$69.99
$169.99
$699.99
$799.99
$849.99
$949.99
$1999.99
$4849.99
$2399.99
$6149.99
$2599.99
$49.99
$129.99
$299.99
$149.99
$249.99
$29.99
$39.99
$199.99
$499.99

Needless to day, the inner pages quote similar prices. So do brochures and advertising from many other retailers.

What's the point?

Why does the retail price of every item end in 99 cents? Here are two possible explanations:

  1. Those prices are simply the result of rational calculations based upon the actual costs of manufacturing, distribution and transportation, advertising, retail overhead, and a fair profit. It's just a remarkable coincidence that they all end in .99.

  2. The retailer believes that we are too impulsive, too naive, or too slow-witted to grasp that a $699.99 item will set us back seven hundred dollars. We're more likely, they believe, to buy the $699.99 item than the same item for a penny more.

Pick the more likely explanation.

Customer reaction

If the explanation above is b, then we feel insulted by the retailer. Why should we do business with a company that publicly insults our intelligence? We complained about this along with other deceptive pricing practices back in 2005, but the practice as become even more widespread with every passing year.

My response for both personal and company purchases is to avoid dealing with those retailers. I not only refuse to buy the product carrying the deceptive price; I don't buy any product or service from a retailer whose advertising lists every item or almost every item with a deceptive price. If they choose to insult my intelligence, why should I reward them?

Fortunately, in a large city like Chicago with a broad range of retailers, we can still find stores that conduct business in a fair and responsible manner. That may change in the future, but for now those retailers will get our business, even if their stores are less convenient or if we have to pay a few cents more.

Readers will make their own decisions.

Current Champion of Misleading Prices

May 29, 2014

The trend may be spreading, but it's hard to imagine a more blatant example than the four-page "Memorial Day Sale" insert in today's Chicago Tribune. It lists large-screen televisions, washing machines, and refrigerators.

PageNo. of prices ending in 99 cents No. of prices not ending in 99 cents
1150
281
374
4190

I'm particularly tempted by that 50-inch Samsung television for only $999.99. Of course, I could never justify spending a thousand dollars on a television.


Computing Equipment, too!

April 26, 2015

If you thought that this sleazy practice was limited to pharmacies and discount appliance stores, you may have been surprised by today's full-page ad on the back of Parade magazine from a once-dignified computer vendor. It listed four items:
  • A portable reduced from $849.99 to only $499.99.
  • A desktop reduced from $808.99 to only $579.99.
  • A portable reduced from $449.99 to only $379.99.
  • A speaker reduced from $69.99 to only $49.99.

The "savings" were all rounded, of course. e.g. $350 but not $349.99.


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Last modified April 26, 2015