Take Currency Symbols Off The Menu, Restaurant Patrons Spend More

Have you ever noticed that the menus in nice restaurants leave the currency signs off prices, or spell them out in words rather than Arabic numerals? The intended effect is pretty much what you would assume – to remove the association between prices on the menu and actual money. Now, there’s actual academic research showing that half of this theory is true.

The study was conducted by Cornell University‘s Center for Hospitality Research at a restaurant of the Culinary Institute of America in Hyde Park, NY. Also known as “the significantly more delicious CIA.” The study had an unexpected result, in that guests spent more when presented with a menu listing numeric prices with no currency sign (“20″) than with the prices spelled out (“twenty dollars”) This was the opposite of what psychological theory predicted.

“People who tend to be more price conscious, they’ll start adding up what their part of the check is going to be,” [study co-author Sybil Yang] said. “If you make that process a little more difficult for people by not presenting a number in Arabic numerals but rather as text, it becomes so much harder to add.”

Instead, the authors figured the dollar sign and the word “dollar” reminded folks they were about to spend money. The number format with no dollar reference took away that emphasis.

Fascinating stuff if you’re in the food service industry, or if you’re interested in retail psychology. Though this phenomenon did not escape the notice of Stuff White People Like.

On menus, dollar signs matter [Myrtle Beach Sun] (via Steve)
$ or Dollars: Effects of Menu-price Formats on Restaurant Checks [Cornell University]

(Photo: johnjoh)

Comments

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  1. Porcelina says:

    I create menus for restaurants (I am the graphic designer) and for any higher end location, we always do this. It really does bring in more money.

    • Laura Northrup says:

      @Porcelina: Do you do the Arabic numerals without currency signs, or spell it out?

    • MostlyHarmless says:

      @Porcelina: I like taking symbols out of my amateur design works simply because it looks better that way.

      • Porcelina says:

        @MostlyHarmless: Wow. No need to be mean. I am not an amateur, I just have to make things to the specifications that my company tells me to. I don’t just go around making them for myself. So, while I am DOING MY JOB. I asked if it really made a difference in the profits, and I was told yes.

        @Laura Northrup: Just the Arabic numerals.

        • GuinevereRucker says:

          @Porcelina: I wonder what would happen if you tried *Roman* numerals :)

        • Cant_stop_the_rock says:

          @Porcelina:

          I don’t think he was implying that you’re an amateur.

        • MostlyHarmless says:

          @Porcelina: Whoa whoa whoa… Thats not what I meant at all.

          All I was saying is, that I do it because, to me, it looks better. I do that with most symbols that i can remove or replace with text without obfuscating the meaning. I was only noting a personal preference, and saying that it probably looks more elegant that way anyways (seeing as how higher end restaurants do care for such details).

          And I am not objecting to the observation at all. You are the professional here, clearly you know more. If you say that it brings in cash, and if a study says it does, there’s really no reason or grounds for me to object to that one.

          Also, it would be naive to assume that restaurants do it only because it looks elegant, and not because it brings in cash. The elegance is merely a side effect.

          • Porcelina says:

            @MostlyHarmless: My bad! I guess I am just sensitive today! Eeek. I totally get you now that I re-read it. And, yeah, it IS more aesthetically pleasing to the eye. For sure.

        • ARP says:

          @Porcelina: I’m not sure @MostlyHarmless: was intending to be mean, just that she’s an amateur designer and likes to do that.

          @MostlyHarmless: You know this, but comment boards are have the sensitivity of email x10.

        • nakedscience says:

          @Porcelina: If you’re this sensitive over one line that was clearly not mean, then you must have a heart attack every day you go online.

        • Saisu Mimen says:

          @Porcelina:

          A little defensive, aren’t we? Way to misread MostlyHarmless’ post. You clearly have a chip on your shoulder regarding your job.

    • larrymac thinks testing should have occurred says:

      @Porcelina: Do yo do that thing where the concept of two decimal places gets thrown out the window too? I hate that. If some uber-trendy appetizer costs $14.50, then show me that, not “14.5″

      (not venting at Porcelina so much as at “things I hate about menus”)

    • sibelius says:

      I think the results of this study are even more obvious than the researchers realize.

      People who go into expensive restaurants tend to spend more — regardless of how the menu prices are set up.

      Most expensive restaurants have very nice menus. They are simple, elegant, and reflect a since of poise, dignity, blah, blah, blah. You’re regular price-aware Jack-In-The-Box crowd isn’t likely to go there, expect for very special occasions.

      From what I’ve read it is assumed that the researchers have a good test environment. If they gave 1/3 of a restaurant menus with “$20″; one third menus with “Twenty Dollars”; and one third menus with “20″ — and they did it over the course of an entire week I might be impressed and interested in the study. Unfortunately, it’s difficult for me to appreciate a lot of “studies” out there today based just on what they tell me. If I don’t have a good understanding on HOW the study was done, it’s not worth noting. We all know about statistics — you can make them reveal anything you like if you just show and hide the right configuration of data. Most researchers (and pollsters) first come up with an answer (what they want the final result to be) and then they nit-pick through statical data pulling information that supports their already-determined-conclusion and tossing away any information that doesn’t support it. Pollsters use trick questions to get the results they want.

      • floraposte says:

        @sibelius: All three pricing formats were offered at the same restaurant, thus nullifying the variable you suggest.

        It sounds like you’re questioning the methodology but you haven’t looked at the study. There’s a link to the abstract in the Consumerist article, and you can get the full paper from there.

      • u1itn0w2day says:

        @sibelius: I agree . I think it has as much to do with already being more pricey . The occassional splurgers like anniversaries and birthdays won’t care nor do I think the people that eat out at those restaraunts on a regular basis worry about price .

        I have read where alot of the higher end chain eateries are starting to hurt which tells me there’s a regular business crowd that has an expense account or some serious business/customers at stake . Was the study done pre crash ? .

    • anduin says:

      @Porcelina:
      amateurs…

  2. morganlh85 says:

    That’s one of entries on “Stuff White People Like.”
    [stuffwhitepeoplelike.com]

  3. Preyfar says:

    Rabbit Rabbit Rabbit, $39
    Duo of Beef, $42

    It’s nice to that high end restaurants have naming conventions no better than Outback.

    • Gramin says:

      @Preyfar:

      Yeah… but the quality of food is so much better at Farmhouse (the restaurant whose menu is shown above). Outback purchases products based on cost and they try to keep costs low. Farmhouse uses sustainable products and only the highest quality meats and produce.

  4. morganlh85 says:

    NM, just caught the last sentence of the article.

    Hilarious site though.

  5. SkokieGuy says:

    And when prices are spelled out in arabic characters, people spent even MORE!

    twenty dollars = العشرين دولار

  6. RandomHookup says:

    Pretty brave there, using the term “Arabic numerals”. ‘Round here, we call ‘em “Merikan numbers”.

  7. SafetyMachete_GitEmSteveDave says:

    Wow, that’s how much they cost? I always thought that was how many calories were in the food. Maybe that explains the recent weight gain…..

  8. Laura Northrup says:

    @GuinevereRucker: Clearly Cornell left an important component out of their study.

  9. sir_pantsalot says:

    Our inability to solve word problem has come back to bite us in the ass.

  10. captadam says:

    Doesn’t work for me–if I see a menu with just numerals and no punctuation or decimal places, I think, “whoa, expensive–back away.”

  11. swearint says:

    I hate it when restaurants leave off the dollar symbol. I don’t think it looks elegant, just different or incomplete. Also, it is ambigous. I’ve always wanted to attempt to pay in some alternate form of currency, maybe wampum or seashells.

  12. savdavid says:

    I wonder when McDonald’s will tap into this research and say “Is your order correct on the drive-thru order screen? This is a BigMac for 3, medium fries for 1 and a large Coke for 2?

    • geeky_reader says:

      @savdavid: Or if they were to elegantly write out the amounts in words – cursive on the drive-thru screen would probably end up looking like a game of space invaders.

  13. H3ion says:

    Quarter Pounder avec fromage 4

  14. Robobot says:

    @larrymac: I hate that $14.5 thing! It’s one of my major pet peeves about hipster hang outs after the awful house music. a) It doesn’t make sense for them to have decimals in their prices when you know the prices are inflated to hell already. b) If their menus got any more pretentious you could hang them on the wall and call them art. They might as well just round it up to $15. (Or “15″ as they tend to do.)

    • Cant_stop_the_rock says:

      @Robobot:

      Maybe they did a mail merge for their menu and they didn’t have the column format correct in Excel :P

  15. sir_eccles says:

    If you need to ask, you can’t afford it.

  16. David Brodbeck says:

    It continues to amaze me how easily people are fooled. It makes me wonder about the Calorie counts on menus that some states are enacting…if people aren’t smart enough to know that “15″ means the same thing as “$15.00,” how likely are they to understand the concept of a “Calorie?”

    • SafetyMachete_GitEmSteveDave says:

      @David Brodbeck: Are we talking Calories, or calories?

    • jtheletter says:

      @David Brodbeck: You mean being that a Calorie is actually a kilo calorie, and given that the specific heat of water is about 4.184 Joules per gram that means your typical 250 Calorie donut is actually about 1,000,000 Joules?

      Heh, I enjoyed doing that conversion for people after learning it in HS chem*. If you want to succeed in your diet, count everything in Joules instead of Calories, it creates terrifyingly high numbers.

      *Disclaimer: HS chem was a long time ago folks, be nice if my rough numbers here aren’t quite right. ;)

  17. ophmarketing says:

    Maybe it’s just me, but whenever I see a menu with the prices written as whole numbers/words/sans dollar signs/whatever, I immediately begin watching the costs more closely, because I’m fairly certain that it’s going to be a more expensive meal than usual.

  18. TouchMyMonkey says:

    Restaurants that put “18″ on their menus instead of “$17.95″ tend to be the type for which “18″ is the price of an appetizer.

  19. pecan 3.14159265 says:

    I notice this when I go to more upscale restaurants and I’m okay with it. Whether it brings in more money from me or not is irrelevant – I first noticed this among upscale casual and upscale places, so isn’t it logical most people would spend more money there anyway? Ordering a bottle of wine at Outback clearly isn’t the same as ordering a bottle of wine at Farmhouse, Ruth’s Chris, or Morton’s.

  20. Hoss says:

    So Cornell did a study at one high-end restaurant by giving customers different menus and the result was 8% higher spending on menus without dollar signs. Doesn’t sound very scientific. How many customers where there in total? Did the menu include an unusually expensive item where just a few orders would skew the results?

    When I’m in a high-end restaurant, I’m not looking at price, it’s more what sounds more attractive. (But I do notice the $60 mac and cheese w shaved truffle…)

    • pecan 3.14159265 says:

      @Hoss: The Mac and Cheese is $10. The truffles are the other $50.

      The best soup I’ve ever had was cream corn soup with truffle oil at Townhall restaurant in San Francisco. Amazing soup. Never underestimate the effect truffles can have on a meal. It’s pure decadence with a super high price tag.

      But the soup was only $9 – er, 9.

      • Hoss says:

        @pecan 3.14159265: It’s unlikely that that the truffle oil ever made contact w a real truffle. But I agree, it’s a nice flavor

        • pecan 3.14159265 says:

          @Hoss: Oh I know, and it’s precisely why the soup was only $9. Still, real truffles are extremely, ridiculously expensive for commonfolk so I’m good with truffle oil as a substitute.

  21. ludwigk says:

    I remember reading about this in either “Freaknomics”, or “Predictable Irrationality”, that is, when the concept of currency is abstracted even just a little bit, people tend to spend a lot more because the brain no longer associates the task at hand with money any more.

    I ran into this same problem in Japan just a few weeks ago. The exchange rate for JPY to USD is drop-dead simple: At the time it was 95 Y = 1 USD, so basically a yen is a penny. 1000 Y = $10. Despite this trivial exchange rate, I found myself spending money like crazy, only realizing afterward what I’d really spent, and how expensive everything was.

    What was interesting is that when I went to S. Korea, where the exchange rate was 1000 KRW = .78 USD, or basically 1000W = 4/5 USD, I did a lot better, either because I’d started to actually think about exchange rates, or because it took longer to calculate Price/1000 * 4/5.

    • l_d says:

      @ludwigk: I’m not sure that your problem in Japan was completely because of not associating the yen with money. Many things are just plain more expensive there. Also, the presentation is better, which can lure you into spending more than you would otherwise.

      However, it is also possible to spend significantly less for many things there than it is in the US.

    • oneandone says:

      @ludwigk: when the concept of currency is abstracted even just a little bit, people tend to spend a lot more because the brain no longer associates the task at hand with money any more.

      I think that’s one of the reasons why casinos like chips. It’s easier to put down a chip worth $100 (or, for me, $20) than a bill of the same value. Especially if you have to count out several bills every time.

      I’m sure there are security advantages as well, but I think the symbolic abstraction of currency is also important.

  22. Nytmare says:

    @Cant_stop_the_rock: That is just the impression I would get. Unprofessional.

  23. LegoMan322 says:

    This is a very cheap slide of hand routine. Like when a car dealer takes your keys and does not give them back.

  24. eb0nyknight says:

    I have to admit I just did this today for lunch. I read the menu and saw 23 for the price, which I knew to be the price in dollars.

    Still ordered it anyway, when I would have never, ever paid so much for an entree before. Then afterward when I got the bill, my mind screamed 23 dollars, are you sniffing glue!?!?!

    I guess sometimes even when you are conscious of a decision, your sub-conscious can still override you. Scary!

    • pecan 3.14159265 says:

      @eb0nyknight: Are you sure it was the numbers overriding your sensibility? I mean, maybe that was the most appetizing and tempting thing on the menu. Did you have something else you liked more and didn’t get?

  25. breny says:

    Slightly off-topic but relevant, this technique works as well when telling a customer a price. I worked in sales at one time. Instead of saying it’s “one hundred DOLLARS” I was taught to say it’s “one hundred.” Any time you remind a person about the DOLLARS they’re spending they’re likely to spend less.

    But smart consumers read Consumerist so we know about these tricks!

  26. Corporate_guy says:

    As long as the price is there who cares. They should make it a requirement that places put prices on their menus, especially drink menus.

  27. macbeach says:

    Don’t worry, in another year or two that 42 next to the item will be the number of zeros in the price and there won’t be containers big enough to carry the cash you will need so everything will have to be charged.

    But only the ultra-rich, and government employees will have credit cards. The rest of us will be hanging out outside the kitchen for scraps.

  28. supercereal says:

    @nakedscience: Aren’t you the one who goes completely nuts when someone even hints at how stupid HIPAA and fences around pools are? The irony is overwhelming.

  29. MissPiss says:

    Wow..I wonder if studies show that half-naked women in advertisements sell more products to male consumers?

  30. fatetwister64 says:

    I hate when places do this. No price on the glass of coke = 4.50 coke.

  31. gaywolverine says:

    This has been known for many years and is not dependent on the level of restaurant. It works the same for both a Dennys and Le Cirque. I would also tell restaurant people that 7.99 is smarter pricing than 7.95. That is 4 cents pure profit that psychologically mean the same thing to people. In other words, nobody leaves a restaurant for a 4 cent pricing variance.