Why do gas prices end with 9/10s of a cent?

[rockin'robin]

Dear Call Box: I will soon be 89 years young. Ever since I can remember, gasoline prices have always ended in 9/10s of a cent. Before I leave this planet, I would like to know the reasoning for this pricing. Can you find the answer? - F.H.

Dear F.H.: We contacted Reid Porter at the American Petroleum Institute in Washington, D.C. Porter said he was told the partial-cent pricing dates back to the 1920s when gas was cheaper by the pennies from one retail location to another and a penny meant more to drivers then.

Marketing studies also show that products priced with odd-number endings sell better.

Finally, in 1932 when the federal gas tax was first levied, it was 1 cent a gallon, so it was easier for the retailers to price their gallon-price ending in nine setting aside 1 cent for the tax.

Why do gas prices end with 9/10s of a cent? | jacksonville.com

 

[AlleyCat]

Interesting. I didn't know about the 1932 gas tax levy. But that study is right, marketing studies do show rounding down a number sells better. It's why houses are generally listed at (for example) $349,990 or thereabouts, rather than $350,000. The 5 looks more scary than the 4 does even though it's only a $10 difference.

 

[Tousi]

Interesting. I didn't know about the 1932 gas tax levy. But that study is right, marketing studies do show rounding down a number sells better. It's why houses are generally listed at (for example) $349,990 or thereabouts, rather than $350,000. The 5 looks more scary than the 4 does even though it's only a $10 difference.

Same here re not knowing about the levy in THAT year...makes me wonder what purpose the feds were going to use it for because the National Interstate System didn't come into being until Eisenhower.....