text: It has to do with the value image for consumers. Odd pricing became common just after the invention of the cash register. At that time, employee theft was a troublesome problem, and it was thought that requiring clerks to ring up each transaction on this new device would reduce theft since it keeps a record of each transaction. But dishonest employees could simply continue to pocket the money while avoiding ringing up the transaction at all. Odd prices would force the salespeople to issue change, making it difficult to pocket the customer's payment without recording the sale. So Macy's New York began the practice of pricing products a few cents below even dollar amounts, and other large retailers soon followed suit.\n\nAnother explanation is that during the 19th century, British goods were thought to be of higher quality than American goods. Conversion of the British pound to American dollars usually resulted in an odd price. Before long, products with an odd price were associated with higher quality.\n\nIronically, the reverse seems to be true today. Odd pricing is more closely associated with discount products, and research shows that products priced in round dollar amounts carry a perception of higher quality. One study of a drug store chain found that rounding prices up to whole dollar amounts not only failed to affect sales, it had a positive effect on the store's image. It was estimated that the chain had been losing approximately $850,000 a year using odd prices. Many upscale restaurants now price their meals without any decimal place at all -- they simply show the even dollar price. This creates the psychological impression that their customers don't quibble over pennies -- pure snob appeal.\n\nHappy Answering,\n~Tia~\nLive from the big, purple brain\nhttp://advision.webevents.yahoo.com/asktheplanet/brain.html\nASK YOUR QUESTIONS, CALL THE BRAIN - 212-382-3592