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alexonline alexonline is offline
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Join Date: Apr 2006
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Psychological Pricing Barrier

What experience / knowledge do you have with pricing and sales? For example, £10.99 compared to £9.99, £19.99 to £21.99 etc.
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Play!! Play!! is offline
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Not really thought about it much. I just use a set formula to come up with prices.

I always thought that when they said £9.99 it was so they could advertise or say it's under under £10. Sort of the same as cars at £9995. I supose psychology comes into it but not for all people. I usually round prices up when I'm buying so £9995 would register as 10k in my head.
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MailOrderCo MailOrderCo is offline
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I know I read a lot but I read of a very successfull man in the USA who studied pricing, he believed people often put 9.99 as a way to make customers think its lower in their head, when actually 9 is the highest pricing figure and his disagreed with it.

Using this he then went about altering all of his prices to 10.00 etc trying to put as many 0's in place of his higher value numbers, even though in most changes he was making 9.99 to 10.00 or 49.99 to 50.00

Adding to this, in rounding up or down to O's he also changed a 4 figure price such as £49.99 to £50 taking away three high value 9's and replacing with just one 0 so customers then see 2 figures insted of 4.

He thought people who put 49.99 were implyng their customers were stupid and woud not relise 49.99 is simply 1p lower than 50

His online business in the states makes over $5M a year from his home office, just checked its now $6M
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Play!! Play!! is offline
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Nice info. What does he sell?
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RichardJohn RichardJohn is offline
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I read somewhere ages ago that items priced at a round number were more likely to get stolen than if it's £29.99 rather than £30.
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Play!! Play!! is offline
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hahaha, now that's some crazy info. There must be a few websites and articles around the net on the subject.
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RichardJohn RichardJohn is offline
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Wikipedia: Others have suggested that fractional pricing was first adopted as a control on employee theft. For cash transactions with a round price, there is a chance that a dishonest cashier will pocket the bill rather than record the sale. For cash transactions with an odd price, the cashier must make change for the customer. This generally means opening the cash register which creates a record of the sale in the register and reduces the risk of the cashier stealing from the store owner.
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RichardJohn RichardJohn is offline
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http://en.wikipedia.org/wiki/Price_ending
http://en.wikipedia.org/wiki/Psychological_pricing
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gwhaskew gwhaskew is offline
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My old business studies teacher used to say the reason you get prices ending in 99p was so that the shop assistant had to open the till to give the customer change which reduced the amount of employee theft.

He was adament that it wasn't about psychological pricing.

G
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MailOrderCo MailOrderCo is offline
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the theft thing does not make to much sense, as if someone is large enough to have emplpyee's, then the item will usually have to be scanned to produce a receipt for the customer.

Also if an employee went to work with a view to pocket customers money, he/she simply could keep a pocket of pennies to give people change and pocket the rest himself.

I am going to put the small figure pricing into action and see what happens
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gwhaskew gwhaskew is offline
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Quote:
Originally posted by MailOrderCo
the theft thing does not make to much sense, as if someone is large enough to have emplpyee's, then the item will usually have to be scanned to produce a receipt for the customer.

Also if an employee went to work with a view to pocket customers money, he/she simply could keep a pocket of pennies to give people change and pocket the rest himself.

I am going to put the small figure pricing into action and see what happens
But they didn't have this 10 years ago let alone 80 years ago...

Besides I have worked in places which have old **** tills... New tills are really expensive!



EDIT: This made me laugh the word begining with a C with an R and an A ending with a P is edited out as stars! This word is a pre-watershed word.
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MailOrderCo MailOrderCo is offline
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Quote:
Originally posted by gwhaskew
But they didn't have this 10 years ago let alone 80 years ago...

Besides I have worked in places which have old **** tills... New tills are really expensive!



EDIT: This made me laugh the word begining with a C with an R and an A ending with a P is edited out as stars! This word is a pre-watershed word.
I can see your point on really old tills, don't worry i know which word you meant ;-)
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