There’s a convenience shop near me that sells a two litre bottle of milk for £1.69, where they cheat me out of a penny every time I go there. And I love them for it. It’s almost twice the price of our nearest supermarket, but also almost twice as close. With the extra five minutes to get to Morrisons saving me 70p, the equivalent of a £8.40 an hour reimbursement, I’m fairly happy to use the closer store, and I’m just happy to know that they will shamelessly stop short of full committal to the psychological pricing lie.
An unflinching psychological pricing trick
This shop uses a very simple tactic when it comes to psychological pricing. They have prices ending in 9s, like everyone else, they just don’t bother giving you the penny.
As we all know, psychological pricing encourages a consumer to round the price down rather than up. Supposing that the brain processes the left number with most importance, seeing the 1 in £1.99 rather than rounding it to 2, this is naturally supposed to encourage purchases. There’s some controversy about how effective this is; countless studies have proved that everyone does it, of course, and others argue for and against exactly how people perceive these prices.
Personally, I believe this store’s tactic gives a sound case for how futile that pricing is.
I tend to round up when I see a number like priced down, because when I’m left with a fistful of change my priority is not to count my savings and reapply that shrapnel – it’s to relieve my pocket of the weight and inconvenience of small coins. When I buy something for £1.99, I count that penny as a problem to get rid of, not the first in 199 steps to the next purchase. When I go to the convenience store, I consider myself to be paying £2 for milk instead of £1.
For the £1.69 milk they’ll always give me the 30p. Sometimes they ask if I want the penny, sometimes they don’t bother. Part of me feels immediately cheated, thinking hey, that 1p is rightfully mine. Another part of me recognises, though, that in committing to a £1.69 purchase I already gave up that penny seeing it as £1.70 (or even £2). That part of me appreciates it’ll make life a little bit easier, not having to pick through my change later in the day.
Where a trick becomes an admission of truth
I don’t believe they do this to try and save the pennies – much as it might add up to tens or even hundreds of pence in additional revenue each day. They simply recognise head on that faffing about with pennies is a waste of their time, and a waste of my time, and they’re basically broadcasting the undeniable truth, let’s be reasonable the real price is £1.70. It’s buying into an eternal trick that everyone uses, for whatever reasons and to whatever results, and at the last minute admitting that yes, this is just a trick. And we’re okay with that. Because it is what it is, and it ultimately makes life easier to admit that we’re living this lie, without arguing about it, than to deal with the details. They know it, I know it, you know it.
Psychological pricing is immortal now, except, of course, when people want to be seen as making an exception – like classy burger restaurants who think charging £15 makes them look sophisticated. But when everyone is doing the same thing, just because it’s the way of the world, to the degree that a shop can make a promise so empty that they can fail to deliver on their 1p of change and I can actually be happy about it, what does that say for these kind of tactics? Everyone does it. Everyone assumes it works. But for me this case makes a really refreshing change (and, ironically, by not making change – yes I went there).