(largely based on from a post I wrote earlier this year)
Non-rounded prices are mostly a proved marketing practice, so effective that retailer fear to cease using. Even premium brands like Apple use non-rounded prices.
Apart from the Wiki entry @jimimatthews posted, here’s another interesting reader:
So even if people say that don’t like it, they are unintentionally attracted to it. The article even mentioned that some company tired getting rid of charm prices and ended up with damages.
Psychology is interesting.
On the other hand, the article also discussed that there are situations were rounded prices might be useful, namely emotional and impulse purchases like certain luxuries. It suggests that based on the type of purchase - intellect purchases or emotional purchases, the pricing psychology differs. If a product is purchased out of emotions, rounded prices work better. Some other articles agree (this one has proper journal citations):
if your customers are buying for pleasure, you’ll probably shift more stock with ‘double 0’ style pricing.
It too suggests that intellect purchases prefer non-rounded prices, and emotional purchases prefer rounded. I personally find this quite unintuitive - wouldn’t “intellect” people spend more time to round up those prices themselves? And if I purchased in impulse, wouldn’t I fall into the non-rounded “trap” instead? This wasn’t discussed in both articles.
At the end of the day, it’s quite difficult to clearly define what actually qualifies as an intellect purchase, and what are emotional purchases. I mean, even Apple also price non-rounded despite their luxurious price tag. The first article further complicated stuff by saying that:
But when these luxury items are marked down for sale, non-rounded and charm numbers come back into play.
So if customers looking for a bargain, non-rounded numbers are “better” - implying people looking for bargains are by definition, “intellect buyers”.
What kind of customers are Eve serving?
What made you buy the V?
For a bargain, a cheaper Surface Pro alternative?
For the perfect-speced 2-in-1?