We all know that a $19.99 shirt is not $19—it’s $20. But somehow, prices ending with .77 cents and .88 cents set off a different reaction in our mind. When our brain sees those numbers on a price tag, it thinks we’re getting a spectacular savings (and we might be…but we just as well might not).
Retailing expert Mark Ellwood, author of the forthcoming book Bargain Fever: How to Shop in a Discounted World, says this is neuroeconomics at work. Something about such a specific number suggests that the price has been calculated exactly against the cost of making that item, but it’s really just a selling tactic, says Ellwood. You may not necessarily be saving money.
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