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  • Category: Club House Discussion

    Why are products priced at one less than a hundred or a thousand?!

    We often see products, whether in a store or online, with a price tag that says something like:
    Just Rs.99
    Only Rs.199
    Buy this smartphone for a steal at Rs.7,999
    Offer open for a short period - Rs.999 only

    I find this very odd to keep it one rupee short. Even in foreign currency we can see such offers: Only $99 or $299.

    What exactly is the point of it? Just some marketing gimmick to make the buyer feel that he/she is not buying something too expensive? Or is there some other reason - maybe some belief in numerology?!
  • #22293
    It is believed that the practice started during the age when cash registers were used. If the price was below ,say $1, the sales person needed to register the sale in the cash book so that he can return the change to the customer. Thus it was meant to prevent employees from swindling practices. The tradition has since been carried forward though it holds no meaning today.

    As a sideline, have you got back the One Rupee when purchasing items? The one Rupee just goes unregistered and just come to think of it now - how much money is swindled in the process with a huge number of customers leaving that one rupee behind!

    Live....and Let Live!

  • #22297
    That is also create an optical illusion of getting something in the lower number series, say when it is written 299, it psychologically gives an effect that we have purchased something in the range of 200 "something".
    That "something" adds up to many things for the seller and subtracts the same from the buyer.

  • #22304
    Some think it to be having some thing to do with taxation. I would not like to buy this idea as tax slabs are not based on those amounts as far as I know. Actually, there is a psychological satisfaction of not buying something expensive on the part of the buyer. But, do they really realise the tactics being played by the stores?
    Live....and Let Live!

  • #22305
    Just wanted to share an experience regarding this.

    In one of those very popular shopping malls, we had to pay some amount with this 99 non sense. The fellow at the counter just kept quiet while paying that one rupee back. I asked him politely the amount is something 99 right? Yes he said, I said, where's the change, he was smiling. I said, how about if I smile instead of paying that 99? The one rupee coin came back.

  • #22307
    Exactly, that was my point in my first response to this thread. This one rupee goes unaccounted. Can you guess how much this amount comes up to considering large number of consumers?
    I guess the payment by cards is the best way to guard against such things. Your money is protected - not only upto Rupee, but even paisa. Especially so when the rates are entered using bar code scanners as we have been seeing in most of the departmental stores.

    Live....and Let Live!

  • #22308
    Yes Timmappa, nowadays we are paying through cards only and what more, we have almost stopped visiting these stores. Online shopping has given us a good alternative, rest are still better with our old, known stores who aren't keeping in their stock these 99 tricky stickers.

  • #22309
    But these Batas and such other stores still keep the tradition. Seems like their sales persons are biggest swindlers!
    Jokes apart, paying with plastic money helps you get rid of such practices where you are made scapegoats of these 99 games.

    Live....and Let Live!

  • #22310

  • #22314
    The information in #22293 was very enlightening and Anwesha's experience in #22305 was really hilarious! I am going to use her idea if ever I am faced with a store cashier who does not return that Re.1.
    Regards,
    Vandana

  • #22322
    Well that's a great fact. I was also wondering to know the reason for the same after looking to the topic of thread. I just opened the thread to know the reason. Thanks a lot Vandana for creating such an interesting thread. And a lot of thanks to Anwesha and Timmappa Kamat for sharing your views regarding the same topic.

    I would also love to share my experience on the topic:
    I live near a market place where I have a huge options of shops and malls. I mostly go to the nearby shops for buying small products like home products and others. What mostly I get the bill after buying the products is Rs 499, 299, 199, 24 etc, with mostly Rs 1 less in the total bill. Then the shopkeeper ask me to pay the bill and I pay the bill like Rs 500, 300, 199, 20 then what I get back as a change is toffee or biscuit for a five rupee change or NOTHING for one rupee change.

    Regards,
    Aman

    I find that the harder I work, the more luck I seem to have.

  • #22324
    Yeah this time, we'll also carry a packet of toffees and pay them with that. These people need to be taught a lesson.

  • #22325
    Well, yes, Anwesha,
    The next time when I will go to buy anything from those shops and get into the same situations of paying something like Rs 24, 99 or others like this then I will return the same toffee which they gave me in the past. This will surely teach them a great lesson and they will stop doing so in my nearby areas. I also suggest you to try to find out such a way to apply in the shops which gives you nothing as a change. As we both can easily change the system in our nearby areas. Or I will also think not to buy anything from the shops which returns toffees and chocolates to me as a change to me.

    Regards,
    Aman

    I find that the harder I work, the more luck I seem to have.

  • #22406
    Mission successful ! Refused toffees and compelled 5 shopkeepers to give back the change. Wish could catch the faces they made and could share with you all.

  • #22408
    That's very great Anwesha. Its a very good thing. I hope this would have taught a lesson to the shopkeepers in your nearby areas. What I did is, I just refused to buy things from those shop which returns toffees as a change. I will also be doing the same what you did in future. As the company becomes by combining individuals.
    Regards,
    Aman

    I find that the harder I work, the more luck I seem to have.

  • #22410
    That's a good tit for tat, Anwesha. Having such attitude will definitely have a good results for the consumers.
    A shopkeeper from my neighbourhood does the same with kids. When the parents send them with Rs. 10 to bring some thing worth say, Rs.5 , he intentionally makes them buy some thing else to make a purchase of Rs. 10!

    Good to see your fighting spirit and kudos for making us think of this route.

    Live....and Let Live!

  • #22424
    No no, you are not getting it fellas! Let me explain you the real fact. Whenever you visit any e-commerce site and select a product category, say "clothing", then you may have noticed a left sidebar with which you can select your range. Now if you check "Under 500" then all the products that come under Rs 500 will be shown to you. That's why sellers who intend to sell a product for Rs.500 will generally mark it at Rs 499, so that it comes under 500 category. Now if another seller, sells the same product for Rs 501, he will experience a huge loss of sale (because his product will not be shown if buyer selects UNDER 500 category) as compared to that one who sold it for Rs 499! So that's the power of this 99 club. This is the reason why you would see the products ending with a 99!

  • #22425
    O-k-a-y...now what else can be done, but what about retail stores? they on't have any price range like that, and we mostly see such 99 club thing in shopping malls?

  • #22426
    Consumer psychology is the real reason behind it.

    Search on Google for Consumer behavior studies and you'll find explanation for pricing ranges.

    If you ask people to choose in between 9 or 10 to pay for a product they choose 9. Not just because it is cheaper for them but it makes them think they are not paying 10. And that is one reason the pricing is always 9.99 for many online and offline products. And truth is shopkeeper or online sites don't charge you 9.99 but whole 10 or taxes additional to that.

    These prices are set based on those consumer reactions.

  • #22427
    Well that's a trend now! Everyone wants to be in 99 club!

  • #22428
    Prashant has really brought before us another logic behind the 99 club. His views truly hold value as far as online stores are concerned....and that's a great marketing strategy!
    And all other retail stores are following the trend just blindly.

    Live....and Let Live!

  • #22436
    This is turning out to be a vastly humorous thread, what with smiles and toffees...just loving it!
    Regards,
    Vandana


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