“…the average person treats a price ending in .99 as if it were 15 to 20 cents lower.”
The tendency is called left-digit bias, when the leftmost digit of a number disproportionately influences decision-making. In this case, even though the real difference is only a penny, research shows that, to the average person, $4.99 seems 15 to 20 cents cheaper than $5.00 – which results in selling 3 to 5 percent more units than at a price of $5.00"
I understand. But what if you’re selling a refrigerator or laptop for $400? You could list it for $399 or $395. The left-digit bias is not just pennies / cents. It applies when going from $99 to $100…$399 to $400…$999 to $1000 etc.
Then I want $400. Like I said, I onlyhave to sell it once. I don’t need to sell it to more than one person.
And if I saw someone selling a refrigerator for $399, personally it would make me doubt their trustworthiness.
The left digit bias is real over large groups of people. You’re going to sell more laptops at $399 because of left digit bias, but it doesn’t make a discernable difference when you’re only selling one. And again, then I have to deal with making change. Somebody’s going to hand me four hundred dollar bills, and I’m going to dig into my pocket for a crumpled single? Or maybe three quarters, two dimes, and a nickel?