And 99 Cents: Difference between revisions
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The gimmick also lends itself well to advertising trickery, as someone can claim their item is available for "under $30!" Well, yes, technically speaking, $29.99 ''is'' less than $30...
There's also the possibility that people will be fooled into thinking that "$29.99" represents an exact price while "$30" represents an approximation. Odds are, unless this is a jurisdiction with no sales tax (or with value added tax – "VAT content" – already included in the price, European-style), the final price is going to be well over $30 after taxes. Add the endless outstretched palms seeking gratuities in certain fields (tourism, restaurants, taxis...) and the costs go higher still.
In Australia, because the lowest coin used is 5c, prices are normally And Ninety Five Cents instead, but you can sometimes see .97, .98 and .99 on prices. In Canada and Australia, the lowest coin used is 5c but prices are still "And 99 Cents". If that supposed 99-cent item is $1.12 or $1.14 after tax, it will be rounded to the nearest nickel ($1.10 or $1.15) in cash transactions.<ref>The majority of Aussie retailers have POS registers that automatically round prices to the nearest 5 cents, regardless of what number they end in. EB Games, for example uses the Swedish Rounding System.</ref>
* However, if paying via EFTPOS or credit card, the amount is not rounded.
There's also a quirk in Ontario's sales tax regulations; meals priced $4 or higher are hit with a 13% value added tax, but the $3.99 special (which buys increasingly little these days) is taxed at a lower rate. The provincial government has tried to revoke this tiny tax break a couple of times, only to meet strong pushback from fast food restaurateurs.
This thinking is often carried over to large-ticket items, like cars, at least in the US—nobody cares about a few cents when they're buying a car, but the MSRP (Manufacturer's Suggested Retail Price) in dollars will end in 7 or 5 far more often than it will end in 0.
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