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It is because they have found that people ignore the fact that they are saving only 1 penny.

For example, people are much more willing to spend $99.99 than they are $100.00. $100.00 sounds like a big number to most people, while $99.99 sounds so much more affordable.

Also, people tend to forget the $0.99 they are spending. So if you have a product placed at $5.99, people will tell you that it is only $5, when in reality you will be spending closer to $6 (depending on where you live, you may be spending closer to $7 after tax )

essentially, it is all phycological, and is priced that way to get the consumer to buy their product.




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