Actually what the motivation in having price point ending in .99? Why can't I simply price my app at, for instance, 10? I understand there is a pricing psychology in play and I faintly remember it has something to do with accounting but I can't recall the specifics. Can anyone shed some insight?
In addition to the other replies (which I agree with) about the psychological aspects, another aspect historically is that avoiding round numbers meant that change had to be given when making a purchase.
I.e. if you bought something that cost $5 you could just hand the $5 to the cashier and they could just avoid ringing you up and pocket the money. In contrast if the object cost $4.99 or $4.95 say they would have to ring it up in the till so they could open it to provide change to the customer.
The psychology is (allegedly) simple. When you see a price like $4.99, unless you're pre-conditioned, you are expected to read it as FOUR-99, essentially $4, even though it's $5 for all practical purposes. Often it is styled as $4.⁹⁹ to double down on this effect.
This looks silly, and many people, including me, have taught themselves to recognize this pattern and round the price correctly without a mental effort.
Some people, of course, fall for it; I suppose younger kids are heavily affected.
How can it be that anyone in the world falls for this anymore? My daughter recognized this obvious pattern when she was 7 years old: "It's $5, dad, why don't they just say $5?" I wonder if pricing something at $4.99 have anything more than a vague subliminal effect these days?
Part of it is that people want to be tricked. If I want to buy something but I'm on the fence about whether it's worth $5 then I think the $4.99 price works as like a semi-subconscious plausible deniability mechanism to let me allow myself to buy it.
Imagine two apps you’re scrolling by in the App Store. One is $5, the other is $4.99. Barely going attention (essentially picking subconsciously rather than consciously), you choose one to click first. What are the odds you clicked the $4.99 one?
I am old enough that when I was a kid in the UK there was still such a thing as a halfpenny (pronounced: ha'penny). Although please note: I am not that old; this was ½p - half a 'new penny', i.e. 1/200 of a pound sterling, and not to be confused with the old ½d, half of an old penny, which was 1/480 of a pound (or two farthings). Predecimal currency was well before my time. By over half a decade, in fact. But anyway, point is: of course this meant that some things were priced to end with £0.99½p. The rules are universal.
Just to add a data point about the pronunciation; the way you've written it leads me to read it as "har-penny", which I imagine is valid, however we pronounced it in my family as "hay-penny".
French stations too, they’ve introduced the 1.779€ a liter pricing a dozen years ago, so, 4 significant numbers. On a 100€ refill, it’s 10 cents, ie a drop.
