With chip readers, auto-reload apps, and one-click online purchasing, it’s only too easy to buy something without fully registering how much it costs. That said, even if you’re not counting out nickels and dimes for the cashier these days, you’ve probably still noticed how often prices end in .99.
Maybe you assumed it had something to do with tax laws, or else it was a leftover practice from decades ago, when things cost less and pennies mattered more. In fact, it’s actually a clever psychological tool that tricks your brain into thinking the price of an item is lower.
“Because we read from left to right, we pay less attention to the end of the number versus the beginning,” DealNews.com consumer analyst Julie Ramhold told Reader’s Digest. So, for example, your mind will interpret $9.99 as $9, though it’s obviously much closer to $10.
Just one dollar’s difference might not seem like enough to drastically affect your decision on whether to buy something, but it can push an item into a lower price range—and that’s enough to make your mind think it costs significantly less. To your subconscious brain, a one-digit price like $9 seems a lot cheaper than a two-digit price like $10.
Though ending prices in 9 might be the norm, there is a fair amount of variation when it comes to retailers’ pricing tactics. Live Science reports that because we often perceive a price ending in 9 as a cheap deal, some stores—like J.Crew and Ralph Lauren—save the nines for their sale items, and use numbers ending in 0 for their full-priced items, giving the impression that those items are high-quality. Thrift stores, on the other hand, often use whole numbers for all their products.
[h/t Reader’s Digest]