The rational consumer, like the black unicorn, is a myth. Otherwise how could you explain this study that showed that customers buy more when the last number on the pricetag is nine, even if the item is more expensive?

A national woman’s clothing catalog tried something out a few year ago. With one group of customers, they took one of their dresses and raised the price from $34 to to $39. Sales shot up 25%. With the second group of customers, they raised the price from $34 to $44. There was no change in demand.

What is the explanation for this strange behavior? It seems that, absent other cues, shoppers look at the last number to see if an item is on sale — even if the total price is actually greater.

To counteract this natural tendency, it’s better to do your research across several stores before walking in so you can see which items are actually discounted. Then go in and buy the items on your list. Or, only shop from the sales rack.

Mind Your Pricing Cues [Harvard Business Review via BoingBoing]

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