Why price tags end in 99? [Explained in 60s]

Ever wondered why prices end in 90 or 99? You can find “99” price tags everywhere, from your bar of chocolate at the supermarket to your monthly gym subscription. So why do products have prices ending in 99 rather than rounded up to the next figure?

Due to what is known as the left-digit effect, customers tend to round to the next lowest monetary unit. We see the left digit first, and so instinctively form an opinion on price before our rationale can catch up. A lower first number at the start of a price (e.g. $3.99 vs. $4.00) has a huge psychological impact, even though the price is more or less the same. Endings in 99 increase sales of low value items, with the customer focusing on the lower digit on the left. #explained #science #Psychology #marketing