9/10 of a cent

private joker · #1 09-07-2005, 06:36 AM

How come gasoline is the only product that is priced to the tenth of a cent? Tacos are not $1.99 and 9/10. Car washes are not $6.99 9/10. A large Pepsi is not $1.50 9/10. Why just gasoline? And really, whom do they think they are kidding?

I wonder if I'll get any serious answers to this from economics students or merchants.

Jack of Arcades · #2 09-07-2005, 06:42 AM

Think of it as the vig on tourney, IE 2.89+.009. That's how it essentially started, with the 9/10th or 5/10th of a cent tacked on because that was the tax imposed on gas sold.

MCS · #3 09-07-2005, 07:43 AM

Here are two ideas I thought up.

Because almost no one buys gasoline one gallon at a time, they can get a few extra cents out of each customer. So the 9/10 will actually matter.

Also, the calculation of purchase cost is automated, so it's not more complicated to have extra tenths of cents. It would be harder at a grocery store where you'd have to have nonstandard cash registers.

canis582 · #4 09-07-2005, 08:17 AM

I dont believe they give you the extra penny back when you get to your 10th gallon. Imagine how much extra money they have made over the past 20 years.

I forget where I was, but I swear I saw one with x.xx and 8/10s.

Jersey Nick · #5 09-07-2005, 08:21 AM

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And really, whom do they think they are kidding?

[/ QUOTE ]

You can fool some people all the time.

I'm entirely too lazy to google this properly for evidence, but there is the issue of consumer perception at play here. An item priced at $9.99 is more attractive to the average consumer than an item priced at $10.00, even though the savings is only one penny.

Imagine a gallon of gas priced at $3.509. Most folks don't round up in their heads and think of it as $3.51, but 10 gallons = $35.09 or a penny less than $35.10.

Next time you have a passenger in the car, ask them to notice the price of regular gas as you pass the sign. I would wager that the vast majority of people don't round up that penny when they see it.

TheIrishThug · #6 09-07-2005, 08:49 AM

nobody rounds up when they r just checking the prices because all the gas stations do it. so it doesn't make a diference if u compare 3.299 to 3.219 or 3.30 to 3.22.

Shajen · #7 09-07-2005, 09:24 AM

[ QUOTE ]
nobody rounds up when they r just checking the prices because all the gas stations do it. so it doesn't make a diference if u compare 3.299 to 3.219 or 3.30 to 3.22.

[/ QUOTE ]

I round up every time.

I also always get an even amount of gas. IE, $42.00 instead of 41.63

MrTrik · #8 09-07-2005, 11:16 AM

[ QUOTE ]

Because almost no one buys gasoline one gallon at a time, they can get a few extra cents out of each customer. So the 9/10 will actually matter.

[/ QUOTE ]

They are not extra cents. The price is clearly stated. It was put correctly later in the thread by Jersey Guy.

[ QUOTE ]

Imagine a gallon of gas priced at $3.509. Most folks don't round up in their heads and think of it as $3.51, but 10 gallons = $35.09 or a penny less than $35.10.

[/ QUOTE ]

gobboboy · #9 09-07-2005, 11:39 AM

[ QUOTE ]
I dont believe they give you the extra penny back when you get to your 10th gallon. Imagine how much extra money they have made over the past 20 years.

I forget where I was, but I swear I saw one with x.xx and 8/10s.

[/ QUOTE ]

Donnie's discount gas!

Jersey Nick · #10 09-07-2005, 12:29 PM

[ QUOTE ]
nobody rounds up when they r just checking the prices because all the gas stations do it. so it doesn't make a diference if u compare 3.299 to 3.219 or 3.30 to 3.22.

[/ QUOTE ]
No, the gas stations do not round up, at least not in the dozen or so states where I've bought gas.

I have noticed that most places actually describe the price of a gallon using decimals for the pennies and fractions for the nine tenths of a cent. Instead of seeing $3.509 per gallon, you will see $3.50 9/10 per gallon. It is a visual trick becuase most people don't "see" the fraction as part of the price.