Rounding prices up to just below the next whole dollar can give you extra profit on overall sales. You'd have to look long and hard to find a customer who will buy when the cost is $19.95, but won't buy when the cost is $19.99. So be sure that the prices on your bin tags and price tags end in $.99, not $.95. But don't go even one penny higher.
When a customer is considering how expensive it would be to purchase a particular category of product (like a drill, a baseball bat, or a dress), they’ll sense the just-below price (such as $1.99 or $29.99) to be significantly lower than the price that is just one penny more. Also use just-below prices in ads for products where you are not including good-better-best choices.
Once the person has decided to purchase an item from a product category, they might consider an upgrade. The customer is more likely to choose the more expensive alternative if the prices for the two are presented as round prices instead of as just-below prices. So if the prices on the bin tags are $19.99 and $29.99, a good-better ad would list side-by-side the features of each version that are likely to be important to the purchaser and then end with, “All this for less than $20” and “All this for less than $30.” In the store, the salesperson says, “For only $10 more, here are the additional features you’d get.”
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