Hello my nerdy friends,
Do .99 prices, so called “charm prices”, really help sales, or are marketers just copying each other’s incorrect homework?
Let’s take a look.
The study:
Researchers pulled together 69 studies and data from 40,541 participants to compare just-below prices like $9.99 with round prices like $10.00. They looked at purchase decisions, whether the price felt like a good deal, whether the product felt lower quality, and whether people remembered the price as lower than it really was (Troll et al., 2023).
🧪What they found:
Just-below prices did help purchase decisions. It’s not huge, but can be noticeable at scale: out of 200 shoppers, the difference works out to about 53 purchases instead of 47.
And the context changes how effective it will be:
→ the effect was much stronger when people could compare prices directly on the page
→ and much stronger when the left digit changed, like $39 vs $40, than when only the cents changed, like $39.95 vs $40.00
Also, they found that exact prices did not lower perceived quality overall.
And they were much more likely to get remembered as lower than they really were.
Why?
Our brains use shortcuts.
One shortcut is the left digit. So $39 can feel meaningfully lower than $40, even when the gap is tiny.
Another shortcut is deal signaling. Our brains learn that prices ending just below a round number often show up in discount settings, so they can feel like better value.
This also means the effect should be more useful when nearby competitor prices are round. If their prices look like $40, and yours is $39, your offer has a better chance of looking like the deal option. If everyone in your category already uses charm pricing pricing, it may not do much
💡Takeaway
Try just-below prices when the competitor price is well-known and round, or when people compare options side by side, like on category pages, pricing tables, menus, and marketplaces, especially when your price crosses a clear threshold like $39 vs $40.
Stay awesome my friend,
Ksenia (the biggest nerd)
P.S. just a cry of desperation at this point😅: my personal Meta account was disabled, I can’t access any client accounts and I have been waiting for support for what seems like years. If you had a similar situation recently or know anything that can help, just reply to this email, super grateful for any leads🙏🙏