Why Prices End in .99: The Register Myth

You hand a cashier a twenty for something that costs $19.99, and you get a penny back. Why does almost everything cost $19.99 instead of twenty? The answer most people have heard starts in a saloon in Ohio and ends with a bell on a cash register. It is a good story. This video follows it, then checks it against old newspaper ads, catalog experiments, used-car auctions and supermarket scanner data. What this covers: James Ritty's saloon in Dayton, the steamship propeller counter, and the 1879 patent for an early cash register The legend that .99 prices were meant to force clerks to open the till, and why nobody can show it Melville Stone's barrels of pennies in 1876 Chicago, and what the Daily News ads actually show Cecil Adams's microfilm answer: price competition in newspaper ads from the 1880s, inventor unknown Catalog and field experiments: .99 versus .00, and a $34 dress that sold a third more at $39 Why a car just under 80,000 miles sells for about $210 more than one just over How big the left-digit effect is in scanner data, why stores under-use it, and when a nine backfires The last US penny, Canada's cash rounding, and what happens to .99 without the coin If penny change were the whole reason, the penny going away would be a problem for the nines. The story behind the thing. Wren Narration is computer-generated (text-to-speech); research, script and drawings are original. ━━━━━━━━━━━━━━━━━━━━ S O U R C E S ━━━━━━━━━━━━━━━━━━━━ THE REGISTER AND THE LEGEND Wikipedia, "James Ritty" and "Cash register." Ritty's saloon, the 1878 steamship trip, the November 4, 1879 patent, the 1881 sale, and Patterson's National Cash Register Company in 1884. Sources disagree on details such as the saloon's opening year and when the bell was added. Bryson, B., 1994, Made in America, as summarised in Wikipedia, "Psychological pricing." The till-and-penny-change theory. THE ORIGIN STORIES Adams, C., "Why do prices end in .99?," The Straight Dope. The Melville Stone penny-paper story as told by Scot Morris (1979), the Daily News advertisements, and Adams's microfilm timeline. Wikipedia, "Psychological pricing" and "Bata Corporation"; ERIH biography of Tomas Bata. Bata is credited with popularising 9-ending prices from 1920. No archival price list was found. DOES IT WORK Schindler, R. M. and Kibarian, T. M., 1996, "Increased consumer sales response through use of 99-ending prices," Journal of Retailing 72(2), 187-199. Randomised mail-order catalog test: the .99 version sold more. Exact figures in popular write-ups were not checked against the paper and are not used. Anderson, E. T. and Simester, D. I., 2003, "Effects of $9 price endings on retail sales: evidence from field experiments," Quantitative Marketing and Economics 1, 93-110. Three field experiments; $9 endings raised demand in all three, more for new items, less with sale cues. The $34/$39/$44 dress example is the authors' own summary as quoted in secondary write-ups. Thomas, M. and Morwitz, V., 2005, "Penny wise and pound foolish: the left-digit effect in price cognition," Journal of Consumer Research 32(1), 54-64. Five experiments: the effect appears when the leftmost digits differ and is stronger when compared prices are close. Lacetera, N., Pope, D. G. and Sydnor, J. R., 2012, "Heuristic thinking and limited attention in the car market," American Economic Review 102(5), 2206-2236. More than 22 million wholesale used-car sales; price drops at each 10,000-mile mark; the 79,900-79,999 versus 80,000-80,100 comparison. HOW BIG, AND WHEN IT FAILS Strulov-Shlain, A., 2023, "More than a penny's worth: left-digit bias and firm pricing," Review of Economic Studies 90(5), 2612-2645; and the Chicago Booth Review summary of the 2019 draft. About 3,500 products at 25 US chains; a one-cent rise from a 99 ending is perceived as more than 20 cents; the "one and a half to three cents" and "quarter to a third of prices" figures come from the 2019 draft summary; lost profit estimated at 1-4%. Rutgers University-Camden, 2011, "Worth every penny: just-below pricing strategies could backfire." Robert Schindler on quality-focused purchases and luxury goods. THE PENNY TODAY Associated Press and local reports, November 12, 2025, on the U.S. Mint's final penny; production cost nearly four cents each. No new pennies; billions remain legal tender. Canada Revenue Agency, "Phasing out of the penny"; Canadian Bankers Association. Pennies no longer distributed from February 4, 2013; cash totals rounded to the nearest five cents; electronic payments not rounded. ━━━━━━━━━━━━━━━━━━━━ #pricing #psychology #economics #history #explained