Why Do Gas Prices End , in 9/10 of a Cent?.
CNN reports as gas prices continue their meteoric rise, drivers have looked up at
pump price boards angrily.
According to data from AAA, the average gas price in the United States now stands around $5.02 per gallon.
So why do gas stations advertise
prices ending in 9/10 of a cent?.
It may seem odd and unnecessary, but
there is history and strategy behind
fuel prices ending in 9/10 of a cent.
Fractional prices became commonplace
in the early 20th century.
as states across the country started
taxing fuel sales to construct and
maintain highway systems.
Since the average cost of gas at the time
was close to 10 cents per gallon, .
gas stations began adding fractions
of a cent in their pricing in order to
pay taxes levied against them.
Gas stations are also known to
set prices ending in 99 cents,
known as "just-below pricing.".
"Just-below pricing" can trick consumers
into believing they're getting a better deal.
To consumers, a price
such as 19.9 cents feels substantially lower than
the price of 20 cents. , Robert Schindler, professor of marketing at
Rutgers School of Business-Camden, via CNN