Most retail operations end item prices in 9 as prices ending in 9 (e.g. $2.99) as appear smaller than their whole price counterpart, e.g. $3.00 one cent or one dollar higher (e.g. 4.00, 30.00) and have been shown to improve sales significantly. This “charm” pricing strategy has been shown to work with whole prices as well. Items with prices ending in nine (9), e.g. $39 selling better than items with prices not ending in 9, e.g. $40 and even $34*.
On the other hand, “whole” prices with or without the decimals (.00), are reported to convey the impression that the inventory is of a higher quality and to have a warmer, more neighborly feel. In other words, whole prices send a message to consumers elevates a store’s image, with an eye to improved sales , and, of course, they make for simpler transactions.
Some retailers, J crew and Ralph Lauren for example, follow both strategies. They end the price of sale items with .99, but use whole prices for their regular items in order not to “cheapen them.”
Retailers are also shying away from displaying the dollar ($) sign as part of the price. Pricing specialists are finding that prices with the dollar sign can cause buyers to see an item as more expensive than it actually is.
NextGen recognizes the need for owners to display prices in keeping with their pricing strategy. Price-It users are able to select the endings they wish to use as part of their Price-It setup.
* Poundstone, William, Priceless: The Myth of Fair Value (and How to Take Advantage of It) January, 2010, Hill and Wang.