Why the 9/10 on gas prices?

[DrPizza]

And, lastly, are pumps that accurate that they can measure to the thousandths?
If I buy 10 gallons of gas at $2.299, I expect to pay exactly 22.99.

For that $22.98, I should get 9.996 gallons
and for $23.00, I should get 10.004 gallons

Are they accurate to within a 2 thousands of a gallon?
And, that's after 10 gallons!
If they're off by 2 thousandths of a gallon on each gallon, then after 10 gallons, I may have only 10 gallons minus 10 * 2/1000 or 9.98 gallons.

That's a free 5 cents per customer, just because their meters are off.


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Okay, let me edit this question a bit...
WHY is gas charged as so many dollars, so many cents,AND NINE TENTHS OF A CENT
But, no other item that we purchase outside our homes is charged as a fraction of a cent.

I mean, bread is $.99 There have been plenty of sociological/psychological studies that in fact, people are sometimes more willing to pay for something that's $1.32 than $1.29... some prices are just some way perceived lower (being good in math, I have a hard time fathoming the level of stupidity it takes to find $1.32 more reasonable than $1.29)

Anyway, if the gas stations are going to do it to get 90% of an extra cent from each gallon, why don't grocery stores, etc. do the same? Why isn't bread 99.9 cents?
Why not charge $12.499 for that case of beer? It adds up to some serious cash fast (premise of Office Space). If Wal-Mart sold 100,000 items at one of their locations each day, it would amount to an extra $900 a day in profits.

What prevents stores from using a fraction of a cent, yet doesn't prevent gas stations from the same?

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Everywhere I've seen, the price of gas is so much and 9/10 of a cent...

is it 9/10 of a cent to dupe us into thinking we're paying 1 cent less?
(which is seems to be doing, since everyone says "gas is $2.33" when in reality it's far closer to $2.34)

Or is it a result of some national tax or something?

 

[Amused]

To break your brain

 

[dugweb]

its meant to make us think we are getting it for $.01 cheaper

 

[m2kewl]

b/c americans are retarded

 

[Trevelyan]

Originally posted by: m2kewl
b/c americans are retarded

haha

 

[Scarpozzi]

Originally posted by: m2kewl
b/c americans are retarded

I don't agree...they aren't retarded. They're freakin' stupid. :roll:

 

[rh71]

American businesses are the only ones who use the .99 trick ?

 

[tami]

it's like looking at a piece of hardware or an electronic device for $299.99. without the 3 (as in 300) there, it looks like a steal. it's a marketing scheme that really focuses on the customer's mentality. more often than not, people look at the smaller number and go "wow, this is something i can afford."

 

[Zeeky Boogy Doog]

Originally posted by: rh71
American businesses are the only ones who use the .99 trick ?

i always hated that .99 thing, if i were pricing something, i'd price it so that it came out to a whole dollar after tax, that .99 doesn't work anyway, you just sound retarded when you say 19.99 rather than 20 bucks.

 

[Amused]

Originally posted by: rh71
American businesses are the only ones who use the .99 trick ?

Actually, the practice of charging uneven prices was not started as a pricing trick, but an effort to stop employee theft.

Way back when, Macy (of Macy's department store) started charging uneven prices to force employees to open the cash drawers and make change, rather than simply pocket the even amounts.

And it actually worked, too. Employee theft went down after he started the practice.

 

[funboy6942]

Originally posted by: Amused

Originally posted by: rh71
American businesses are the only ones who use the .99 trick ?

Actually, the practice of charging uneven prices was not started as a pricing trick, but an effort to stop employee theft.

Way back when, Macy (of Macy's department store) started charging uneven prices to force employees to open the cash drawers and make change, rather than simply pocket the even amounts.

And it actually worked, too. Employee theft went down after he started the practice.

HA!!!

 

[StageLeft]

Normally when you don't know the answer to something, "People are dumb." is the right answer. In this case we remain true to that approach. People are dumb, and thus think that 2.10 9/10 is appreciably smaller than 2.11 which, while it is truly a bit smaller, it's not enough to make a real difference on anything.

 

[aircooled]

marketing

 

[Modeps]

Honestly, I always thought it was 9/10 of a gallon for the price listed... I never bothered to ask check though... seeing that it never came up as a fraction of a cent that I owed... and rounding, well now... you dont round with money, we all learned that from Office Space.

 

[Jeraden]

I'm guessing at some point many many years ago, some gas chain started to put 9/10s on their prices to make people think they were getting a "deal" over their competitors. As if you saw 2 gas stations, one for a penny cheaper than the other, you'd obviously go to the cheaper one. So other gas chains were forced to also do the 9/10s thing to keep in sync with the originator of the practice. Once it has started, I guess its impossible to get away from it, as it would require every gas company to simultaneously just get rid of the 9/10s thing. If only some got rid of it, it would be back where the public would perceive it as getting a cheaper price from the 9/10s store, even that only amounts to a 1 cent savings with 10 gallons purchased.

 

[dullard]

Many of the things you buy in bulk comes in fractions of a cent. Gas is just the most obvious, since that 0.9 cent sign is everywhere you look.

Sorry if the links are not the best examples, my DSL internet connection sucks and it takes ~2 minutes for a page to load (regardless of size), thus I'm not clicking 100 Google links.

Electricity prices: fractions of a cent per kilowatt hour

Water prices: fractions of a cent per gallon.

Ok, no more links, it is too slow. Ever seen a grocery store three for $1 deal? Yep that is $0.33333 per item. Fractions of a cent again.

Need I go on? Really, just about anything that is low cost and bought in bulk has fractions of a cent per item. Do gas stations have to do it? No. But it gives them another dime per customer, so why wouldn't they do it? Plus it gives one of my favorite Simpson's quotes (Ned is lost and calls Marge and can only see the gas price).

 

[KC5AV]

To start with, the Federal gas tax is 18.5 cents per galloon. Most (all?) other states charge taxes on top of that. I know some states charge that tax as partial cents per gallon. I'm not sure why it always end up being 9/10, though.

 

[Legend]

b/c americans are retarded

Right, because everytime we buy gas we drive around doing price comparisons...

I never look at prices because my entire life gas stations next to each other either have the same exact price or are within one cent of each other.

 

[fatkorean]

Well federal tax on gax is 18.4 cents per gallon. Also wholesale cost of gas is sold in the thousands of a cent, like $1.1934 per gallon. But for retailers, its just a marketing thing. Gas at $1.999 looks a lot better than $2.00.

-fk

 

[MisterCornell]

That's how their economists compute the price. The gasoline business is very competittive. They must have a good reason for doing it that way.

Also when I lived in England, they had unever prices there as well, with everything ending in 99 pence.

 

[dsfunk]

In Cali, I think the total of taxes per gallon comes to a remainder of 9/10. At least that's what I remember seeing on those tax stickers on the pumps.

 

[DrPizza]

Originally posted by: dullard
Many of the things you buy in bulk comes in fractions of a cent. Gas is just the most obvious, since that 0.9 cent sign is everywhere you look.

Sorry if the links are not the best examples, my DSL internet connection sucks and it takes ~2 minutes for a page to load (regardless of size), thus I'm not clicking 100 Google links.

Electricity prices: fractions of a cent per kilowatt hour

Water prices: fractions of a cent per gallon.

Ok, no more links, it is too slow. Ever seen a grocery store three for $1 deal? Yep that is $0.33333 per item. Fractions of a cent again.

Need I go on? Really, just about anything that is low cost and bought in bulk has fractions of a cent per item. Do gas stations have to do it? No. But it gives them another dime per customer, so why wouldn't they do it? Plus it gives one of my favorite Simpson's quotes (Ned is lost and calls Marge and can only see the gas price).

I agree with your points on the water and electricity. But not with the 3 for $1 deal.
You're charged 34 cents for the first can, 33 cents for the 2nd and 3rd each.
If I purchased 1 can of fruit at 3/$1
and 1 can of something else at 3/$1
and 1 can of something else at 3/$1
the total at the checkout would be $1.02.
The fraction of a cent isn't used in the computation. But, that wasn't the point.
The prices aren't even advertised as fractions of a cent... no place else do you see the thousandths of a dollar written out except at a gas station.

 

[PingSpike]

Originally posted by: tami
it's like looking at a piece of hardware or an electronic device for $299.99. without the 3 (as in 300) there, it looks like a steal. it's a marketing scheme that really focuses on the customer's mentality. more often than not, people look at the smaller number and go "wow, this is something i can afford."

It really doesn't though. Who looks at 299.99 and says "Wow! Not 300 bucks! I can afford that!"

 

[Cal166]

Originally posted by: rh71
American businesses are the only ones who use the .99 trick ?

We should create a coin that's .99cents. - Married with children (Jefferson)

 

[Pantoot]

Originally posted by: m2kewl
b/c americans are retarded

In Rome the gas was all 9/10 of a euro, In the Netherlands gas was also priced by the fraction, one place was charging 1,05 7/10 for a liter.

Is that for the americans travelling abroad?