logo
Pricing
Tactic

Offer Discounts With Low Right Digits

The difference between $22 and $23 seems more significant than $28 and $29

$122

Overview

Imagine a $1 discount.

All else equal, this discount is more appealing for prices with low right digits.

Even though the discount ($1) is the same, it feels larger because of the relative comparison:

...because 3 is 50% greater than 2, and 8 is 14% greater than 7, the absolute difference between 2 and 3 is perceived to be greater than that between 7 and 8, even though their absolute differences are identical. (Coulter & Coulter, 2007, p. 163)
$23 and $22 is a $1 difference, while $19 and $18 is also a $1 difference. But the difference between $23 and $22 seems larger because the difference between 2 and 3 is 50% (whereas the difference between 9 and 8 is only 13%).

  • Coulter, K. S., & Coulter, R. A. (2007). Distortion of price discount perceptions: The right digit effect. Journal of Consumer Research, 34(2), 162-173.