Charm Pricing Strategy
Have you ever wondered why a bottle of conditioner isn’t $5 instead of $4.99? The answer is pretty simple: it’s just another marketing strategy called “charm pricing,” which is based on the left digit being reduced from a round number by one cent. Researchers have found it to be super-efficient in increasing sales by 25%, on average.
A one-cent difference doesn’t really matter that much in the grand scheme of things, aka your grocery budget, but you’re more likely to think you’re getting a deal at $4.99 because you subconsciously associate the price more closely with $4 instead of $5.
Another tactic used by retailers is “prestige pricing,” which consists in retailers using round prices so that customers will associate them with quality and luxury.
Regarding “charm pricing”, I was trained from an early age to round UP all prices to the next dollar. If you can make this an automatic thing in your mind, you rob the retailer of one of their tricks.
Don’t forget “Mail in Rebates” as apposed to a reduced price or instant rebate at the register. They sound great. Who doesn’t like getting freebies in the mail? You just have to remember to take the receipt, cut some proof from the box, fill out the rebate form… you did remember to pick one up, didn’t you? Then you mail that in before the deadline. Of course, you pay the postage. Then, if you got everything right, you eventually get your rebate in the mail. The next time you go to that store, you can use your rebate, if you are making a qualifying purchase, and the rebate hasn’t expired. Oh, and if you haven’t forgotten.