We all know that retailers have lots of tricks up their sleeves to get us to buy more. In fact, we have reported on many of those tricks in the pages of Bottom Line Personal to help our readers become savvy shoppers, so I consider myself pretty well-informed.

But…surprise! I recently learned about one trick that I hadn’t heard about—and I am certain that I have been taken in by it more than once. It boils down to this…

When an item’s price ends in “99”—say, $4.99 or even $299.99—you likely are paying more for that item. In fact, based on a paper coauthored by Emory University economics professor Daniel Levy, you are paying an average of 18% more for that item than you would have paid if the price didn’t end in 99. This goes for small-ticket items like groceries…as well as high-priced items such as electronics.

Retailers call this “just below” or “charm” pricing. The reason it works: Over the years, consumers have been trained by advertisers to believe that a price ending in 99 is a good deal, perhaps even that the item is on sale…regardless of the numbers that precede the 99. But the truth is, retailers often use charm pricing to hide the fact that they have raised an item’s price.

So once again, it falls to us—the consumers—to be wary. Do your research…shop around…and be ­especially careful of the 99!

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