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Small Business Tip of the Day: Round It Up

Do consumers prefer to pay in round numbers rather than the traditional method of pricing such as setting prices ending in .95 or .99? Research published in a recent ScienceDirect abstract show that consumers go out of their way to pay in round numbers at the gas pump, ending their gas fill-up at a round number (like 10.00) instead of letting it go to random cents (like 9.87). While prices ending in .95 or .99 have long been used, pricing in round numbers can create a feeling of luxury (that’s why many upscale restaurants use round number pricing, such as $10 instead of $9.99 or $10.00, on their menus). Consider testing different price points with round numbers and seeing if it sways consumers.

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