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Why Does the Price for Gas typically end in 9/10 of a Cent?

Why are gas prices always ending in a 9 or 9/10 of a cent?

1 Answer

This is mainly an advertising trick. You see it everywhere, on car lots, furniture stores, and electronic departments. Gas companies are on to it as well. When you look at the dollar amount of $9.99, for example, your brain will tell your eye to only “really” look at what’s to the left of the decimal. Your brain will think that the numbers to the right of the decimal are not as significant because they’re considered to “loose change”. Your brain sees the numbers on the LEFT as whole dollar amounts, and therefore worth more.

Retailers and advertising companies have spent plenty of money on research, survey’s, and studies to see what will work best when it comes to product pricing. The surprising result of this collected data is that consumers will actually spend more if the price ends with the number 9. This is because the consumer feels as if they’re getting a better deal by not spending as much money. This is considered to be capitalism. Gas industries want to capitalize on their product as much as they possibly can (as we obviously all know) and this has been found to be an excellent marketing tool.

Some gas companies will say they do this because of state and federal taxes. Some theories are that it dates back to the 1920’s when a penny was considered to be worth quite a bit more in value, especially to drivers. Whatever the actual reasoning is behind this tactic, we do know that gas companies are probably benefitting from it, in the hopes that the consumer will not notice the sign in front of the gas station when it jumps from $3.99 to $4.99. That tiny little difference in those numbers spread out to the millions of gas consumers means a huge change in profit for the gas industries.

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