$9.99 vs. $10.00: The Subtle Art of Charm Pricing

If you’ve ever seen something priced at $9.99 instead of $10.00—or noticed gas stations charging $3.49 and 9/10th—you’ve seen charm pricing in action. These small choices aren’t just about saving a penny (or a tenth of a penny!). They’re rooted in psychology, and when used well, they influence how customers perceive value, trust, and even quality.

Charm pricing leverages the “left-digit effect,” where people read prices from left to right. That means $9.99 feels like $9, not $10—creating a perception of affordability even when the savings are minimal.

• Perceived Value: Prices ending in .99 are often associated with discounts or deals, making an item feel like a better deal.
  
  
• Consumer Behavior: Studies have shown that charm pricing can increase sales by creating a perception of value. Similarly, Buy One Get One Free (BOGO) sales, or 10 for $10 deals, create a sense of urgency for consumers.
  
• Digital Behavior: Ever searched for real estate online? If you cap your budget at $400,000, a home priced at $401,000 disappears from view. That’s why sellers price at $399,000—just under the threshold. Likewise, if the next common breakpoint is $375,000, a listing at $374,900 stays visible, while $376,000 gets filtered out. That $1,100 could make the difference between being seen or being skipped.

Charm pricing isn’t just for retailers with flashy signs and sales stickers. It can work in construction, manufacturing, and even professional services—anywhere price perception matters.

• Retail Products: A classic. $19.99 feels more affordable than $20—even if it’s just a penny off. 
• Promotional Offers: Use .99 or .95 endings during sales to make discounts feel more dramatic. 
• Consumer-Facing Line Items: In service-based businesses, $1,495 may feel easier to accept than $1,500, especially in estimates. 
• Bid Ranges and Packages: In industries like construction, quoting $49,900 might stand out against a clean $50,000 bid—without cutting deeply into your margins. 
• Equipment Sales: For parts, tools, or seasonal bundles, charm pricing can encourage faster decisions without seeming like a “hard sell.”

Charm pricing isn’t a one-size-fits-all strategy. In some industries, it can feel out of place or undercut your credibility. Here’s when it’s better to skip the nines and go with cleaner numbers.

• Premium Services: Round numbers tend to signal confidence and quality. Think high-end restaurants or boutique firms that skip decimal points entirely. 
• B2B Transactions: Precision matters in professional relationships. For enterprise clients or technical bids, clean pricing feels more honest and trustworthy.

If charm pricing feels like it could work, start small. Adjust one or two items, and watch what happens.

• Know Your Audience: Do your customers respond better to savings or simplicity?
  
• Test and Measure: Try charm pricing on seasonal services, smaller packages, or frequently compared items.
  
• Stay Consistent: Make sure pricing still reflects your brand—don’t confuse bargain pricing with cheap work.

Pricing isn’t just math—it’s communication. The way you present a price can shift how people see your product, your service, and your business as a whole. Charm pricing can be a subtle but powerful tool that helps customers say “yes” with confidence.

At Froehling Anderson, we don’t just look at your numbers—we help you understand what they mean and how to use them strategically. Whether you’re updating your pricing, evaluating margins, or planning for growth, our team can help you find the financial approach that fits your goals (and your customers).

Let’s talk about a pricing strategy that actually works—for your business and your bottom line.