Read the Price Tag: Find Out Why!

Read the Price Tag: Find Out Why!
Written by Oana Schneider

We cannot live without doing at least a bit of shopping. Whether it is grocery shopping or a shopping spree to freshen up our wardrobes, we all do it. If you are like most of the people out there, you read the price tags on the things you buy, but you most likely don’t think too much about it.

You most likely don’t think how the .99 ending or how the .97 ending came up and whether or not it is actually influential for your shopping activity. And if it says it’s on sale, you probably don’t even think if that bargain is actually a bargain at all. You most likely simply make the purchase and pay at the checkout.

However, you might be surprised to learn that pricing and marketing experts are using a really wide range of techniques mean to influence us all. Following, we will present you with some of these techniques, so that you can decide for yourself if you should really buy an item in the future or if its “sale” is just another “trick” meant to lure you into buying more.

Offering You Three Options to Choose From

This is usually a technique used with subscriptions and other similar purchases and it sometimes comes under the name of “decoy pricing” as well. Basically, what pricing experts do here is offering you with three options to choose from, instead of only two – the third one being there just to offer some sort of “contrast” for you.

For instance, you will have the option of a subscription that includes the online newspaper only (and it will be the cheapest), an option that includes the “offline” newspaper only (and it will be the most expensive) and an option that includes both the online and the offline newspaper (and it will come – at least roughly – at the same price as the second option). Most people will go for the third option because they will feel that they are getting a “bonus” as compared to the second one.

While it is not fully necessary to avoid this technique used by pricing experts, you might want to think twice before settling on anything. Think of whether or not the “third option” would really provide you with any kind of value – and if it doesn’t, go for the cheapest one to save some money.

Read the Price Tag: Find Out Why!

Read the price tag!

Offering You Prices Ending in Number 9

This is a very common technique and it is quite likely that you have spotted it before as well. Everywhere you go, from supermarkets to clothing stores and electronics stores, you will see prices ending in “9”. Most likely, you have noticed this and you will always know that $9 is almost the same as $10 and that you are not actually saving anything.

And yet, there is some sort of magic surrounding this number. Studies show that pricing products with numbers that end in “9” has led to boosting sales with an average of 24% (and this came out in no less than 8 studies made from 1987 to 2004!).

A very good example as to how the “magic” of this number works is an experiment researchers did. When a product was reduced from $48 to $40, the sales were boosted, but not as much as they were when the same product was reduced to $39 from the same initial price.

“Magic” is a very accurate word to describe what happens with the famous “number 9”, especially since researchers have not actually been able to explain it. We are all able to make easy round-ups, but when it comes to “9” and price tags, we seem to simply forget everything we learned in elementary school…

The Anchoring Technique

If you have ever entered a rather expensive store, you probably noticed how items that are quite basic on the surface have real big price tags. And yet, we are all very happy to buy them all. Of course, a brand’s celebrity has a good role to play in this, but our willingness to pay more for basic items may be related to another technique as well…

Put simply, the anchoring technique is a tactic used by price experts when they put a very expensive item very close to a less expensive one. For instance, if you will see a watch that costs $9000 near a skirt that costs $99 (yes, the “number 9” again), you will most likely be tempted to believe that the skirt is not expensive at all – even if you can find a similar design in another store at half of that price.

When you go out shopping next time, think well about this and think well if an item is really worth its price. Look after “contrast”-priced items as well and be aware of the fact that they are very intelligently placed near the less expensive items precisely because it will make you more willing to spend more in that particular store.

Pay Whatever You Want

Now, this technique sometimes works splendidly in convincing us to buy certain things, but it can sometimes be quite tricky as well (both because we would naturally be tempted to believe that some sort of trick is in the middle and because we might ask for prices that are much too low – and that would not be profitable for the stores).

One famous example of a case when this worked out great is with Radiohead’s In Rainbows album. When they released it online in 2007, they told their fans that they are free to download and share the album with their friends and that they could pay for it as much as they believe it is worth it. Later on, it was released that Radiohead made more money with In Rainbows than it had done with any other album.

Read the Price Tag: Find Out Why!

Spend money wisely!

Influencing Our Perception of a Product’s Price

Sometimes, marketers and price specialists call for this means of convincing us to pay for their products and services. For instance, if you would subscribe to a certain service that costs $1 a day, you would do it much more happily than if you did the same thing with a service that costs $365 a year (which is basically the same).

Also, keep in mind that many times, we are influenced by the things surrounding the products we buy. For instance, we are more inclined to pay more for a beer when it is served in a fancy restaurant than when it is bought at the local mini-market. Also, we are more inclined to buy coffee from Starbucks (rather than coffee at the automated machine) because we are influenced by the atmosphere there, by the looks of the cup in which the coffee comes and by the other “external” factors.

This also works wonders for marketers around winter holidays. If you enter a mall around Christmas, you will find that each of the shops will try to lure you in with really beautiful windows, with scented candles that remind us of Christmas scents (cinnamon and apple for example) and with nice music playing in the background as well.

What to Look After in Price Tags?

So far, we have discussed about the various techniques pricing specialists and marketers may apply to lure us into paying (more) for a product. However, which are the basic things everyone should be looking after when in a store? Here are some shopping tips grouped according to the major shops out there:

  • If you frequently shop at American Eagle Outfitters, look after products ending in .99 or .00 – they are your best deal in the store. On the other hand, prices ending in .95 are actually full price, even if you may be tempted to believe that those products are on sale.
  • If you shop at BJ’s Wholesale Club, look after price tags that end in .90 or 00 because they are the “manager’s discount”. They will be reduced every week by 10% until they total savings reach about %60.
  • At Costco, prices ending in .99 are usually the full prices for those particular products. Prices that end in .7 offer some sort of savings, but it is not always the best kind of saving you could get. Furthermore, products with prices ending in .00 are usually products that have been returned unopened and that are very frequently a great buy. Also, it is worth noting that generally speaking, any kind of price ending in something different than .99, .7 or .00 is a manager’s special or a manufacturer’s special and it is a good deal.
  • If you want to shop at Home Depot, keep in mind that prices ending in .06 are usually on clearance and that they will stay this way for about 6 weeks. If they have not been cleared after 6 weeks, they will be sold at a new price, ending in .03 – and this is normally the very best price you can get in this shop.

About the author

Oana Schneider

Oana Schneider is a published author located in Chicago, Illinois, who currently works for as a communication specialist and blog editor. She writes about lifestyle, family budget, has a degree in Communications and advocates for women’s rights. Her future plans include getting a Labrador and losing a few pounds.


  • I always find that the trick “it’s cheaper if you buy two” always gets me. I think about it later and I realize that I only ever wanted/needed one of the things, but spent extra money under the guise of “saving money”

    It’s funny how this sort of psychological stuff works on you.

    • Yeah, I’m the same. “But it’s cheaper…” I argue with myself. Usually though I just kind of realize on the spot that “no, actually it’s ALMOST double the prize you’d pay otherwise, you idiot!” and I end up buying just one after all if I just need one, haha.

      It’s easy to fall into the trap though.

      • It’s a trap that consumers shouldn’t actually fall into, though. It’s obvious that if you get two items at a discount, you’re still going to wind up paying for more than you really need if you only need one of that particular item. It’s never a deal for anything, no matter how much you save, when you wind up buying more than you actually need.

        • I agree that people SHOULDN’T fall into that trap but we do.

          My teen daughter will often tell me, look mom, if we buy me two shirts, both are cheaper. Oh really sweetheart? But you don’t need any shirts right now so how is buying them saving money? Even if she does need a shirt, paying full price for one when you need one is better than paying less per shirt for two when she doesn’t need the second.

          My DH is often draw in by economies of scale on the major brands without considering that I don’t usually buy that particular brand. “Look honey!” he says, “if we buy 12 rolls or Charmin, it’s less than if we buy 3 4-packs.” Great, if I usually bought Charmin…but I don’t. I buy $store toilet paper and 12 rolls of that is less than 1 4-pack of the Charmin.

    • Bulk buying does work out to your advantage though, assuming you are able to use the bulk goods. Alternatively, group buying is an effective way to take advantage of retailers trying to promote items in bundles.

      If you have a shopping buddy, you can often hit better price points when purchasing household goods like cleaning liquids, toilet paper and condiments.

  • Wonderful article! I definitely have noticed that there is a bigger chance I will purchase an item if it ends in number 9. It seems like there is something that clicks when I see that number, as if I am getting a better deal at an item that cost $19 versus $20.

    I think many consumers fall into this trap and purchase something they normally would not simply because this number concept catches their attention.

    • You’re definitely right, but it’s best to ignore the ending numbers because 99 cents might seem like a penny less, but it can sometimes cost you far more than that for a product that’s actually a better deal while costing less or even slightly more in some cases. Too many people let the numbers dictate what they purchase, and that’s a huge mistake.

  • When it comes to food items, the only thing that matters about the price tag is what the price per ounce says, which is almost always available on food item tags. That’s how you figure out which items are a deal and which ones are an overpriced compared to each other for the same foods. I don’t pay much attention to price tags because I generally know when I’m paying the right amount or more than I should.

    • That would be an excellent piece of advice, but most places in my country (New Zealand) don’t actually have a price per ounce (or kg).

      Generally I have to do the maths myself and it gets tiring, but it is a very useful way to save money.

      • My suggestion is to get a unit conversion app if you’re doing comparison shopping frequently while converting units. They’re usually extremely easy to use (if you can use a calculator, you’re set!) and require only a few moments of your time.

        It’ll allow you to get accurate prices when comparing different sizes or pricing structures without needing to do too much mental arithmetic.

    • Exactly, I love when stores actually put the price per ounce or price per unit. It always saves me money — THOUGH I will say that there are a few stores near me that consistently get the math wrong on them so I’ve learned to not blindly trust those numbers. I have no idea if they’re just outdated price tags or mistakes or if there’s a law about those, but I always suggest doing the math at least for a few products to see how trustworthy it is.

  • What a splendid article! This one saved my life!(Literally). With the different variations and techniques that this article taught me, I can actually save enough money at the end of the year.

  • That would be an excellent piece of advice, but most places in my country (New Zealand) don’t actually have a price per ounce (or kg).

    Generally I have to do the maths myself and it gets tiring, but it is a very useful way to save money.

  • Ah yes, the old price tag. Apparently certain companies, where salesman operate on commission, there’s a bar code included on the price tag that essentially discreetly tells them what the value of the item is to the store. So let’s say you’re looking at TV that’s $999 and you want to talk them into dropping the price. Well, the bar code on the price tag could be like… D9T40R99. While this looks to gibberish to the consumer, the sales person may read it as the item being valued at $940.99 (take out the letters) and to not offer it below that. Now, it’s hard to say which companies still use this, but a few do.

  • There was some research that was done why the human brain thinks that $1.99 is significantly cheaper than $2.00. Since we read from left to right in English, we see the number 1 first, and immediately associate the product with costing one dollar. I’ve already learned to read those pesky 9s rounded up, but I still catch myself thinking that I’m not paying that much for whatever I’m buying, so be careful!

    • I remember learning about this in one of my psychology courses. I now mentally convert any .99 signs up to the nearest dollar without fail. In fact, I noticed a lot of stores have been using different numbers like .89 or .79 to further confuse people.

      To err on the side of caution I just round up to the nearest whole dollar on just about all price tags that I’m looking at.

  • Oh the good old Costco trick! I remember reading about this years ago online and found it hard to believe that it would be so simple. The subsequent Costco trip was eye-opening as I looked about and noticed the same numbers coming up, with the sales ones corresponding to (most of) the sale items in the little flyer they hand out at the door.

    It’s neat that there are these little systems being deployed at different retailers that give “insiders” a bit of an advantage when shopping on a budget.

  • I agree that it is very easy to get taken in by the pricing tricks that stores use. The multi-buy offers can be very misleading. At the supermarket today, I saw pasta sauce at £1.50 per jar. There was a large sign above them reading “Buy 2 for £2.99”. Erm, a half pence saving on each jar? Clearly a trick to get you to buy more!

  • The “pay anything you want” method is also being employed in the gaming industry in the form of the humble indie and royale bundles. Originally, these were ways for indie developers to gain traction for their titles by offering them for “free”. You could choose to donate (a recommended value of $5, but you could change it to whatever you’d like) before you got access to the games.

    Seeing as how the Humble brand is now on their 14th or 15th iteration, it surely must be a successful model.

  • Well though we do not have thee stores in my India, all these customer luring principles do apply equally well here too.
    Very handy tips and surely will keep them in mind when going for purchases.

  • Wow – that’s some very useful information you’ve got there. It’s worth knowing this approach across the whole retail sector, across all markets. I’m definitely going to be more aware of the particular numbers now as well.

  • Very good article! I’ve read about some of these techniques before, like the price in 9, and it was always surprising me that it works. When I do food shopping, the catalogue all ends in 9! I just write down the items I want to buy and convert to the actual price it is (3$ rather than 2,99$) and when I have everything I think I need written down, I go over it and check if it is fine and in my budget.

    I also go in stores and check the first price tag I see. If it’s not in my budget, I look at nothing else and walk out (when I look for clothes).

    I’ll keep all this extra-advice in mind!

  • I don’t shop in most of the stores mentioned, other than Home Depot, but I think many stores have similar tactics. I will definitely keep the .06 and .03 trick in mind when shopping at Home Depot, and will look to see if it’s the same shopping there online. I hadn’t noticed the proximity trick, but will be looking for that one now.

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