Odd Pricing

Retailers use odd pricing to create psychological feeling that a price is lower than it actually is.

Odd pricing is a psychological pricing technique that’s used quite often, and it has become the norm in many sectors. Retailers use this technique to give their customers the impression that the products they’re buying are cheaper than they are.


Odd pricing can be spotted products ending in .99 in most retail stores. So basically, if a product is to be sold for $10.00, the vendor will price it at $9.99. By doing so, people perceive this product to be cheaper than another one that’s priced at $10.00.

Despite sounding a little bit weird when you think about it, this simple-yet-smart pricing technique is proven to boost sales significantly. The reason behind this is that most people’s minds don’t really process the entire price, especially for cheaper products. For most people, $9.99 is just $9 while $10.00 is $10, which is -in theory- more expensive than the $9.99 product. What makes this pricing technique great is that it’s easy to apply and provides guaranteed results. There aren’t many calculations to do and using the odd pricing method is straightforward. Despite being seemingly so simple to use, there are a few things that should be taken into consideration when using this pricing technique.

Important Considerations

Despite sounding like something you should be using in all situations; odd pricing isn’t always the best choice every time. In some cases, it can do more harm than good and should be avoided. By keeping the following in mind, you’ll be able to make the most out of this pricing method.

Is Odd Pricing Right for What You’re Selling?

Setting a price that people perceive as cheaper sounds like a good thing. However, the more expensive the products, the more irrelevant this pricing method becomes. If you price a $10.00 product as $9.99, this is a great thing. People don’t really think that much when buying something in this price range and they just consider the second price as the cheaper alternative. If you’re selling something as expensive as a car or real estate, the odd pricing technique just becomes really awkward. A house that’s priced at $199,999 isn’t more attractive than a house that’s priced at $200,000. People do process prices at this point and what this will do is make the price look weird for no good reason at all.

The Impact of Odd Pricing on the Perceived Product Quality

In some cases, giving the impression that you’re cheaper is all you need to do to sell your product. In other cases, this is something that will result you losing sales. As most people associate price with quality, appearing to be cheaper can make people shy away from your products when quality matters most. If you’re selling something like an electric shaver and you price it at $59.99 instead of $60.00, people might get the impression that it’s inferior to that $60.00 model that your competitor is selling. Before you use odd pricing to give your products that cheaper impression, make sure that this is what will actually get people to buy your products. If you’ve done your research and you’re sure that this is what your customers want, then you should definitely use it. If not, there are other pricing methods that’ll give you better results.

Odd Pricing: Advantages and Disadvantages

Despite being more of a “price display method” than an actual “pricing method”, the odd pricing technique can really impact. There are, however, advantages and disadvantages that are associated with using this method. Knowing them will help you decide if odd pricing is right for you.

Advantage: Makes Your Product Appear Cheaper

Having your products appear more competitive in terms of price by making a minimal price adjustment sounds too good to be true. This, however, is exactly what the odd pricing technique does. If you’re selling products that face high pricing competition, this is an advantage that makes a big difference. Also, your competitors are most probably using this technique so not doing so will put you at a huge disadvantage.

Disadvantage: Giving a Low-Quality Impression About Your Products

This is the major disadvantage that’s associated with odd pricing. When you’re using this pricing method, your products give the impression that they’re cheaper and of lower quality than more expensive alternatives. For some products, this is certainly bad for business and the negative impact of being perceived as cheap exceeds the positive one by far. When that’s the case, odd pricing should be avoided.

How can Sniffie help?

Using the odd pricing technique properly requires that you know the prices of your competitors. By doing so, you’ll be able to set prices that give you the highest profit margins while being competitive enough. Instead of doing all the extensive research that’s required for this process manually, you can use a tool like Sniffie to save lots of time and effort. Check out Sniffie’s features and our service page to find out how it can make checking your competitor’s prices easier.

Want to learn more about pricing?

Are you keen to learn more about pricing? Head to our Pricing Academy, from there you can find our latest articles about pricing and other free resources related to pricing, be sure to check them out!

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