h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

The Monster Raving Loony Party wanted to introduce a 99p coin into UK currency (it's in their highly entertaining manicfesto) and what a thoroughly splendid and great idea it was! Most people probably would welcome a 99p coin because most items in this country are sold at x pounds and 99p and it would save so much annoying fiddling about with small change.

Why do the retailers do that anyway? Why not round everything up to the next nearest pound?

Do other countries do this too (in whatever is the relevent currency)?

Ah but £1.99 looks cheaper than £2.00

A 99p coin would be a good idea, but that would make 1p obsolete and then the government wouldn't be able to get your DNA on file.

It also makes people wait for change so makes handing dodgy notes and running away more obvious.

There are two main reasons for putting 99 at the end of prices:

1. as already said, it makes the price look cheaper

2. If the price is 4.99 and the customer gives in a fiver, they will wait for the 1 penny change and will get a receipt with it. If the price is 5.00 the customer won't usually bother to wait for the receipt, so the till operator can pocket the money instead of putting it in the till.

"Ah but £1.99 looks cheaper than £2.00"

Yeah, agreed it does, but surely, nobody falls for that one do they?

Hadn't thought of the DNA angle but wouldn't it stick to 2ps just as well? (and they'd get a bigger sample).

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Very true. It's like those gadget catalogues which proudly declare that some ultimately useless item is "LESS THAN £500!" when the price is £499.

Another tactic used in television advertising to make things seem cheaper is saying the individual didgits rather than the whole number. "five-nine-nine" sounds less than "five-hundred-and-ninety-nine"

Don't know how your point 2 would actually work, Gnomon, as the purchase is usually already rung into the till before the customer hands their money over, so the till operator would still have to account for it.

Meanwhile, I've never been fooled that 1.99 is in any way significantly cheaper than 2.00, so I doubt anyone else would be either. Though it would make sense if I were buying a house for 199,000 rather than 200,000 (well, maybe, at that point what's another thousand?). Though I'm told that market studies have been done that state putting 99 at the end of prices actually increases sales - go figure.


az

>>"Ah but £1.99 looks cheaper than £2.00"

Yeah, agreed it does, but surely, nobody falls for that one do they?<<


I doubt it, but you never know.

Another thing that goes against the 99p coin is the fact that it would rarely be used. If you're buying something that's £19.99 are you actually going to stand they while you get out a £10 note, a £5 note, 4 pound coins and a 99p coin? No, you'll just hand over a £20 note and ignore the penny.

its only £1.99 thats cheap must buy

"It would be rarely used" - good point, (unless the whole pound denominations were done away with entirely).


For the sensible reasons given above (re dishonest shop assistants or dodgey notes) the cunning retailers would most probably reduce everything to x pounds and 98p anyway making the 99p coin redundant.

Good point, Azahar. I hadn't thought it through.

From what I heard recently, they're planning on getting rid of the 1 p and 2p coins soon.

So look out for everything costing x pounds 95p and then we'll need a 95p coin!

Well, how about this one? I almost never take the 1 cent offered back to me as change so perhaps, in the case of a huge chain store, all those 1 cents actually add up after thousands upon thousands of sales.

az

In Finland, they decided very early on to get rid of the 1 cent and 2 cent coins, and everybody agreed to continue to price everything in cents, but to round to the nearest 5 cents at the till. So if your bill is €5.42, you only have to pay €5.40.

It seems to work.

I can't see them seriously changing much to do with the UK currency at the moment, what with the Euro still a possibility..... Hopfully....

Actually, it is my understanding that Gnomon's point 2 is *exactly* why the 1p coin is still is still in circulation.

Really, Blues? I have no experience of buying anything in a shop or supermarket whereby I just handed over my cash before the item was registered in the till.

In fact, most large chains have a 'security function' in which a till cannot be opened unless a purchase has been rung in.

Of course in a bar one often hands over the cash without seeing if the purchase has been rung in. Which makes me wonder if the price of a pint these days is perhaps 1.99.

az

Oh that it were that cheap. But the curious anomaly that cider is £2.50 a pint (thereby making mine and SLG's round an even fiver) in our local *is* unique in my experience.

It may be a hangover from earlier days - that I wouldn't deny, but it is nonetheless the reason given.

I think it is one of those reasons that everybody knows but nobody has ever thought it through to see if it makes sense (until Azahar did just now).

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az