Ever wondered why we still see things priced at $1.99, or $9.99 or $59.99? I mean nobody really thinks they're getting a bargain, do they?
Well, according to this CBC Cost of Living episode (about 12½ minutes in), some companies, including Walmart and Loblaws, are finally starting to move away from so-called "charm pricing", and rounding up to the nearest whole dollar. It's something I've seen when visiting the UK for some years now; here in Canada, though, it's pretty new.
Charm pricing was brought in decades ago now, the theory being that, given that we read from left to right, we probably don't pay as much attention to the final digits as we do to the earlier ones. It was a way to pull the wool overt ht eyes of its customers.
But, even if that ever actually worked, people are really over it nowadays; they would much prefer to see some price transparency. A store charging $5 instead of $4.99 seems more trustworthy to many people today. It also makes it easier for people to add up their potential bill total in their heads, and, in these days of tight budgets and runaway inflation, that's important. Plus, stores get to keep that extra penny, and all those pennies add up. Win-win.
Any trend toward change is still in its early days, though. Charm pricing will doubtless continue for a good while longer, because, they say, "consumers are irrational". Do they mean "stupid"? "Easily-fooled"? Don't bet the farm on it.
Next up: standardized unit pricing. Now wouldn't THAT be nice.
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