Once again, the analysis showed that prices appeared to be substantially higher when commas and cents were added. An increase of less than $1 resulting from adding cents (or about eight-hundredths of 1 percent) made consumers think that the price was between 5 and 7 percent higher, depending on the dollar amount the students were asked to evaluate. The results also confirmed that once people formed impressions of a higher price magnitude, those perceptions stuck — regardless of whether they remembered the number accurately.
In the final experiment, 166 students were told to imagine that they had just bought a new laptop and had to write a check to pay for it. Four prices were presented visually — $1386; $1,386; $1694; and $1,694. Of the half of the participants who viewed one of the four-digit prices with a comma, 87 percent included the comma on their check, and 81 percent spoke the number in terms of thousands. Of the half of the group who viewed the price without a comma, 68 percent did not include a comma when writing a check, and nearly half spoke the number in terms of hundreds. The results showed that presenting prices in a certain way can have a significant impact on how those prices are later represented by consumers, the authors write.
There are several implications for businesses. Because articulating prices in terms of thousands (using a comma) or including cents will drive up the perceived magnitude of the cost, managers could manipulate how their price tags compare with those of competitors. For example, the manager of a used-car lot could orally or visually advertise his prices in terms of hundreds, driving down the perceived cost in the minds of consumers, while citing the competitor’s prices in terms of thousands (perhaps noting the price in terms of cents, too).
Companies might also want to reexamine their use of pricing strategies that forgo rounding off to higher numbers, such as charging $15.99 instead of an even $16. That approach can be self-defeating, according to this study, because consumers will likely consider the price that includes cents as more, not less, expensive. As the syllabic length of a price increases (by adding commas or cents), so does the time it takes for consumers to evaluate the cost, which can create the subconscious impression that they will be paying more.
One final wrinkle: Because of language limitations, complications arise with bigger prices — those at the $10,000 level and above — making it difficult to apply the researchers’ insights at a new-car dealership, for example. “We avoided use of five-digit prices,” the authors write, “because verbal representation as hundred-products (e.g., $25,834 — ‘two-hundred fifty-eight hundred, thirty-four’) typically does not occur.” Further research may be done on that issue, they suggest. For now, businesses dealing in five-figure prices might do themselves a favor by being as brief as possible and dropping the commas. In other words, offer that car at “twenty-five, eight thirty-four,” and not at “twenty-five thousand, eight hundred, thirty-four.”
Including commas and cents in a price tag will increase the perceived magnitude of a product’s cost in the minds of consumers, well beyond any actual spike in price that occurs or even if the price stays the same or decreases. The “comma and cents” effects hold in both visual and auditory mediums, this paper found, meaning companies can attempt to manipulate their competitive pricing through a variety of advertising platforms.