Common Price Tag Gimmicks Retailers Use To Lure You In

JCPenney’s campaign to revitalize the brand, which includes celebrity commercial star Ellen DeGeneres and a redesigned logo, will continue this week with items priced at round numbers, like $20 instead of $19.99 this week. So what’s the big idea behind how retailers price items? Of course, every tag is aimed at convincing you to buy that item. Let’s check out some other common tricks.

First of all, that $19.99 instead of $20 makes customers less likely to question the value of an item, as it seems retailers have arrived at that precise number through careful calculation, says SmartMoney. That could work in JCPenney’s favor, as it will make the brand seem more luxurious than it actually is. For example, a $32 steaks sounds fancier than one for $31.99, right?

The original reason for round numbers, by the way, was to make sure sales associates would ring up purchases and make change for customers, instead of just pocketing bill for the precise amount.

Another tactic is to sell less calories for the same price — consumers don’t mind as much if they’re paying more for something if they think they’re saving on calories.

Buying more for the same price also works out well for retailers, who can bundle bunches of fruit and vegetables together to mark that as a special deal.

L.J. Shrum, president of the Society for Consumer Psychology, explains to SmartMoney: “Studies show that even though consumers can purchase five lemons for 20 cents each, having the multiple unit pricing increases sales,” he says. It’s called the “anchoring and adjustment bias,” he says.

So even if you don’t want five lemons, you might as well buy them all if it sounds like you’re getting a deal.

For more common tricks, check out SmartMoney.

5 Retail Price-Tag Tricks [SmartMoney]