The Numbers Game: Why Doesn’t the “99 Effect” Work Anymore?

April 2, 2026

By: Ivy Liu

Courtesy of Rajiv Perera via Unsplash

No matter how exceptional a product or service may be, its success ultimately depends on one simple question: Are customers willing to pay the price?

Pricing is a numbers game, and how customers evaluate pricing isn’t purely logical. The key to effective pricing is understanding customer perceptions and utilizing mental shortcuts in numbering.

The “99 Effect” 

One of the most widely used pricing strategies is the “99” effect. Businesses price items ending with $0.99 instead of whole numbers like $10.00. While the difference is just a single cent, it significantly impacts how customers perceive the item’s cost.

People read numbers from left to right, and the leftmost digit carries the most weight in perception. This is known as the “Left Digit Effect.” As numbers increase, this effect becomes even more powerful. For example, $9.99 is unconsciously categorized into the “9-dollar range,” while $10.00 is placed in the “10-dollar range” despite being only one cent apart. When it’s between $99.99 and $100.00, $99.99 feels like a two-digit price, whereas $100.00 feels like a three-digit commitment. This makes the former seem much cheaper and thus more appealing to customers.

Consumers are also influenced by subtle cognitive biases related to numbers. The “Reproductive Symmetry Hypothesis” posits that people prefer even numbers when making arbitrary choices, as they are biologically inclined to pair. This makes odd numbers in pricing feel more precise and less arbitrary in comparison, as it seems more like the result of precise calculation instead of simple rounding. 

The “99 Effect” utilizes both techniques to create the illusion of a significantly lower and thoughtfully determined price. 

From $9.99 to $9.95: Adapting to Pricing Fatigue

The “99 Effect” became less effective as consumers became accustomed to the numbers and started rounding prices up. With the widespread use of $9.99 in e-commerce and discount stores like Dollar Tree, which often rely on psychological pricing strategies to drive sales and sacrifice quality in exchange, prices ending in .99 became associated with lower-quality goods. Now, consumers tend to interpret $9.99 as a signal of cheap in quality rather than a genuine discount.

To adapt, businesses began using “.95” endings instead. The “.95” solution still benefits from the left-digit effect but feels less manipulative and is less likely to be rounded up. Other variations, like .49 or .45, that also achieve a similar effect, saw increased adoption. 

Some companies will even avoid decimals entirely to be disassociated from “cheap” quality.  Instead, they placed “key numbers” in the ones digit, like $47 instead of $50, to signal a discount without relying on the overused “.99” endings.

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How Framing Turns Cost into Value

Instead of simply listing a discount percentage, businesses often frame volume discounts by displaying both the individual and bulk price (for example, $8 each or 5 for $37). When customers see this, they tend to unconsciously do the math to estimate the savings ($37 - (5 x $8) = saved $40). This mental calculation shifts attention from the total price to the perceived deal.

The unconscious calculation introduces what researchers call the “Price Divisibility Effect,” where consumers prefer prices that are easy to break down. For instance, a five-pack priced at $25.00 is appealing because it effortlessly divides into $5.00 per unit. When numbers are intuitive to process, prices feel easier to justify. Customers anchor on the per-unit price rather than the total, thinking “I’m paying $5.00 each” rather than “I’m spending $25.00.” This shift in perspective makes the overall ask appear more acceptable.

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The Boomerang Effect Backfires

But discounts don't always promote purchases. In some cases, it can backfire.

Especially for nonessential items, small discounts don’t strongly motivate purchases. Once customers see the discounted price, their reference value resets to that lower level. When the price returns to normal, the “Boomerang Effect”  can make it feel overpriced relative to this newly established, lower benchmark.

Ending prices with “.99” or “.95” can also miscommunicate a brand’s message. As mentioned previously,  pricing formats are often associated with cheapness or bargain positioning, which can clash with the image that luxury or mid to high-end brands aim to project. In response, many of these brands avoid “cheap-looking” price endings through rhyming prices such as $488 or $8.88, which enhance memorability while signaling intentionality and reinforcing a premium positioning.

For example, Michael Kors, which regularly offers promotions, is commonly viewed as a discount-driven retailer instead of its intended positioning as an accessible luxury brand. As customers grow accustomed to its constant discounts, they are unwilling to purchase at full price. With weaker purchase motivation and the risk of negative associations, overused and misaligned pricing strategies can ultimately backfire.

At the end of the day, pricing never has a right answer. Customers update their knowledge as businesses update their “numbers game” tactics. It varies case by case and person by person. Context is key. 

Next time you purchase something, look at the pricing a little more carefully and you may notice these mental shortcuts. Which of these pricing tricks do you notice the most often? And which ones still work on you?