It makes sense to include prices when writing about products or services. For readers the price is often the most important piece of information.

But there’s a problem with this.

Psychological pricing

Retailers use psychological pricing to trick customers in to thinking prices are lower than they are. Even if you’ve never heard the term before, you’ll be familiar with the idea.

Psychological pricing is when retailers price an item at $1.99 or another number ending in 9.

Researchers at New Zealand’s Massey University found 60% of prices on goods advertised in the local newspaper end in 9.

Other research shows consumers focus on the left-most digits in a price. So they think an item priced at $1.99 is considerably cheaper than one at $2 even though the real difference is just 0.5%. And retailers wouldn’t give customers change if they handed over two dollars.

The journalist’s job

The journalist’s job is not to sell a company’s product. We are not sales or marketing people.

Our job is to inform readers. We aim for accuracy. And this is where some run into a problem.

Informing readers means we shouldn’t play retailers’ Jedi mind trick games. We should write $1.99 prices in our copy as $2. That’s often the amount readers will pay.

On the other hand, accuracy demands we are sticklers for detail and list the price as $1.99.

Why I often simplify .99 prices

There are three reasons why journalists should round-up psychological pricing.

First, rounded-up numbers are technically wrong, but if the theory of psychological pricing is correct, the way the reader understands a rounded-up price will be closer to reality.

Second, rounded numbers are simpler. You more immediately understand what spending $2 will do for you finances than spending $1.99. The price information flows faster to the readers’ brain – this is a key goal in journalism.

Third, the inaccuracy involved is minor. When 99 cents rounds up to $1, the result is 99% correct. With all other prices the accuracy is greater still. Rounding $9.99 to $10 is just 0.1% out.

I can’t always round numbers up

Where I’ve worked as editor or publisher, I make the editorial style rules for my publications. These days I work as a freelance journalist and have to abide by other editors’ style guides. You may find of my copy doesn’t round numbers up – that’s usually because it isn’t my call.

 

8 thoughts on “Journalists and the .99 price tag

  1. Not just to the nearest dollar, but round up to the hundred for big ticket items too. It’s stupid for a laptop computer to be $1699 or $4199.

  2. On a similar but different note, it drives me spare when I see a news article reporting that “Witnesses said the plane was flying at about 304.8 m when they heard the engine stop”.

    That’s not what the witness said, guys. They said “a thousand feet”. By which they probably meant “between 500 and 1500 ft”. Or “between 900 and 1100 ft” if they are expert in such things.

  3. @Bruce, that’s in interesting point, the perceived psychological pricing advantage of moving from say, $4199 to $4200 is a mere 2.4%. That is the difference between the true price and the perceived $4100. Any gain made by a retailer would be insignificant.

  4. Thank you for saying this. I have zero respect for people that shave a penny or a dollar off of a price. Of course, that means I respect approximately no one. (Which seems about right.)

  5. And don’t get me started on the scam ‘customer’ cards at groceries, pharmacies, book stores, et cetera.. You only get the honest price if you have their @$@% card.

  6. I agree with this. Honesty is key, and buying into to the psychological trickery that keeps people purchasing isn’t really that honest. It works, sure, but in the case of smaller amounts, what’s the point?

    Thank you for sharing this.

  7. I drove past a new housing developing advertisingment
    with the price posted from $99999.
    You’ve got to be kidding. They took off one buck for psychological trickery. Lets be honest and say it’s $100,000 and up. Anytime I see a price tag that does NOT have a 9 somewhere, it must be mis-marked.
    I am even seeing 9s at flea markets and gerage sales.
    I am sick of seeing 9s on EVERY price tag.

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