The iPhone 16 Plus starts at $899.
Not $900. Never $900.00.
Apple knows what every retailer knows: ending prices in 9 works magic.
It‘s worked for over a century.
And here’s what is bizarre — it works even when we know EXACTLY what they’re doing. 🤨
Our rational tank brain says “$899 is basically $900.”
We’ll tell our pals we paid $900 for that phone. But when making the purchase, which is what counts, our impulsive dog brain sees that first digit (8) and emotionally anchors to it.
The difference feels bigger than a dollar when we’re transacting. It just does. And when tax pushes it over the line, it’s too late.
Crafty restaurants have discovered another psychological trick. That pasta dish listed as “39” rather than “$39” feels less expensive. Studies show removing the dollar sign significantly reduces price sensitivity — we focus more on the experience, less on the cost.
The dollar sign makes us feel real fMRI-measurable pain about parting with our money. Take it off, and it’s a naked, non-threatening number.
The evidence for 9-endings is everywhere:
- Target’s $19.99 t-shirts
- Amazon’s $29.99 subscriptions
- Costco’s $699.99 TVs (and $4.99 rotisserie chickens)
It isn’t just that it works — but how insanely well it works.
Studies show 9-ending prices can increase sales by 24% compared to rounded numbers. The same item priced at $39.99 always outsells one at $40.00.
Even luxury brands play this game, just with bigger numbers. That $3,999 watch isn’t trying to look cheap — it’s trying to look like it’s in the $3,000 range, not $4,000.
Works every time.
For product makers, this raises an interesting question: When should you use psychology, and when should you embrace transparency?
Action for you: Test both rounded and 9-ending prices with your customers. And if you’re in food service, try removing those dollar signs. But watch for category norms — sometimes being the only one not using .99 can make you stand out, in a negative way.
Laurier
P.S. Ironically, some brands now use rounded numbers to appear more premium. The psychology of pricing never stops evolving. 🪄