Odd-even pricing refers to the pricing strategy of setting product prices to end in odd dollar amounts rather than round even numbers like $9.99 instead of $10.
Research has shown that consumers perceive prices ending in .99 as lower compared to even-dollar amounts. For example, $9.99 reads psychologically as “under $10”.
The goal of odd-even pricing is to make items feel like a better value without technically lowering prices. It aims to increase sales volume and revenue through these subtle psychological pricing tactics.
While the price difference is nominal, studies have found the technique can increase sales by 5-10%. Retailers will often use odd-ending prices combined with promotions like “Was $12.99, Now $9.99” for even greater perceived savings.
Critics argue it is a misleading practice. But odd-even pricing remains very common, especially in grocery, apparel and consumer electronics industries seeking those small boosts in perceived value and shopping cart size.