“…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"
Ending prices with 99 is manipulative. We accept it from businesses because we’re conditioned to, they’re businesses after all! Being manipulated by businesses is just how our current society operates, part of the environment we live in. But if an individual offers us something for a price ending in 99, we’re much more likely to be suspicious of it.
The article actually explicitly mentions this, and suggests you list things for 25 under instead of 1 under, for example, as it won’t immediately trigger recognition that you’re doing this.
All the better to psychologically manipulate our fellow people in pursuit of profit, my dear.
Yeah, if I want to sell something for $400 then I list it at $395 rather than $399.
And then I swoop in and list the same thing for $394
Hell of a deal! I’d pay an extra $6 for a deal like that!
$394.99
But then you wouldn’t sell it for 400.