Odd-Number Pricing: Why $9.99 Feels Cheaper Than $10

Walk down a supermarket aisle or browse an online store, and you'll see price tags like 9,900 won instead of 10,000 won all the time. The real difference is just 100 won. But to shoppers, the gap often feels bigger than that.

We read numbers from left to right. When we look at a price tag, our eyes land on the leftmost digit first. We use that first digit to quickly decide which price range the item belongs to.

10,000 won is a five-digit number starting with 1. 9,900 won is a four-digit number starting with 9. So our brains tend not to think of 9,900 as "almost 10,000." Instead, we file it under the 9,000s, a cheaper price range. This effect, where a change in the first digit makes the price feel like it dropped, is called the "left-digit effect."

Prices that don't end in round numbers give shoppers another pleasant illusion. When a price ends cleanly, like 20,000 won, it can feel like the seller just rounded off a rough guess.

A price like 19,800 or 9,950 feels completely different. Research suggests that prices with a precise ending feel lower than they are, and they look like carefully calculated prices with little room left to haggle down.

You see these prices all the time at big supermarkets and online stores. Shoppers easily feel they got a good deal on a well-calculated price, and sellers may see sales go up, depending on the situation.

Odd-number pricing doesn't work like magic every time. Depending on the type of product and the brand's position, a price ending in 9 can actually backfire.

For luxury goods like designer handbags, high-end hotels, or premium watches, a price that looks cheap can hurt the brand's upscale image. People who buy premium products want prestige, not savings. So sellers often use round prices (also called even pricing), like 1,000,000 won instead of 990,000 won, to show confidence in quality and build trust.

On the other hand, for everyday necessities and mass-market products where value for money matters, odd-number pricing can boost sales. In a field experiment with a clothing mail-order catalog, prices ending in 9 were reported to increase demand, though the effect varied by product and situation. In the end, odd-number pricing is smart price psychology that opens shoppers' minds when they're looking for a sensible way to save.