Money Talks: The Psychology of Pricing

Whether you're shopping for holidays... or for everyday items, you see a heck of a lot of price tags.

While you probably don't stop to consider the pennies on a price tag, let me assure you, your friendly merchant does.

For example, do you see a lot of stuff with prices ending in 99 cents? This is supposed to suggest you're getting the best possible price or the item has been marked down.

And then there's the obvious reason you see a lot of the 99s... because we read from left to right, so this is probably the number we're going to remember, rather than the 70.

What about pricing that doesn't end in 9? That also tells our minds a story. If a price ends in 4 or 7, for example, it's likely to stand out because it doesn't end in 9. And it subliminally suggests the seller has seriously considered the price.

What about when you don't see change on an item at all? In places like expensive restaurants and jewelry stores, things are often rounded off to the nearest $1 - or even $100. Why? Because the message is, this is a classy joint. If you're worried about change, you're in the wrong place.

The psychology of pricing takes place at all ends of the spectrum: from toys to houses. From food to Ferraris. And being aware of it is going to make you a smarter shopper. Want more tips to save? They're waiting at Just do a search for shopping.

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