The E-Sylum:  Volume 7, Number 36, September 5, 2004, Article 11

MORE ON 99-CENT PRICING

  David Pogue of the New York Times wrote a recent column
  on "99 cent" pricing, something we discussed in the E-Sylum
  earlier this year.  He noted: "My last e-column, on what I call
  the 99-centing scam (pricing things at $299.99 instead of $300
  in an attempt to fool consumers), generated some of the
  funniest and most pithy reader responses in recent memory.

  [Here are a few samples.  The first may amount to urban
  legends, but if anyone has references to corroborate the
  tales, please let us know. -Editor]

  "I believe that the origin of 99-cent pricing goes back to JC
  Penny to keep his employees honest." (Various other readers
  cited Mr. Macy, Mr. Woolworth and Mr. Sears.) "At 99 cents,
  they would be forced to open the cash register to give change.
  When the price was an even dollar, employees would be more
  tempted simply to pocket the bill."

  "I believe you can trace the origin of these sales to William
  Randolph Hearst. In the days when one cent would buy
  something concrete in a store, newspapers sold for amounts
  like 3 cents. Hearst encouraged advertisements from the major
  department stores, and told his staff to push the concept of
  prices at odd amounts in order to ensure that there was a
  good circulation of small change so that the public would be
  able to buy his papers."

  "I remember working for a bread company. One of our
  deliverymen was having trouble selling brown-and-serve rolls
  in one of his stores. This was back when bread retailed for 33
  cents for a box of 12.  To try to increase his sales, he went to
  the store manager and got permission to price the rolls at three
  [boxes] for $1.00. When customers saw this price on the rolls,
  they brought them as fast as the shelves could be stocked, even
  through they were paying a penny more this way then when
  they were sold at the old rate!"

  "See, that's why the Sacagawea coin never caught on. We
  don't need a one dollar coin - we need a 99 cent coin."

  Wayne Homren, Editor

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