Friday, September 08, 2006

Interesting little price tag...

Here's an interesting price tag. My wife recently puchased a blouse at (the house of) Target, on sale, for only $5.04.

When she told me the price, I thought she was kidding. Why would a retailer price at $5.04 rather than say $4.99?

One of the reasons put forward for the use of price points ending in 99c is that the shop assistant had to open the till to give the customer back a penny. This prevented them pcoketing the proceeds of the sale.

That is not a reason in this case: one cent coins were removed from circulatation many years ago now, so had my wife paid with a five dollar note and a five cent coin, both could have found their way into the assistants pocket without a "where's my change query?" from the shopper.

Of course, the other possible explaination is that the $5.04 price point has been recommended by some sort of pricing or markedown optimisation software used by Target. Posted by Picasa

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