Why prices are set one rupee less?

Have you ever thought why do retailers add 99 to the end of their pricing i.e 99, 199, 299 etc.? Is there any business strategy of the selling the product at such weird prices? Here’s the answer to this

By ADM Desk

2018-02-22

Adm Desk Feb 22, 2018

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This creates a psychological impression in the mind of the buyer that the product is of less price as it makes the price look lesser. The first digit of the amount will show previous thousand hundred or Million. For eg. when consumers sees the price of any particular product as INR 299, their thought process consider paying INR 200 instead of INR 300 and the possibility to buy that product increases. This is the strategy which companies use to lure the customer and such practice is observed in maximum outlets in malls where you will find price tags with one rupee less.

Earlier shopkeepers used to give toffee instead of one rupee and sometimes people don’t even care to take toffee or one rupee change back and this gets accounted to a lot of money and all this amount is untaxed. This creates black money. This amount may appear to be insignificant for a small shop but if it is a big chain store, then it makes a very big amount and often big chain stores uses this strategy to make good profits.

For eg. If in a Store, on daily basis 500 customers buys the product and they don’t ask for change of INR 1, then the stores makes 500*30*12 = INR 180000 yearly without making any efforts and all this is black money. So next time be careful and don’t forget to take the change.