If you look at a price and you see larger numbers on the far right, it makes a difference in how you perceive the discount compared to small numbers on the right even if the actual differences are the same, according to a new study from the Journal of Consumer Research.
So a price of $188 from an original price of $199 appears to be a better deal than a $222 price discounted to $211, even though they are both $11 cheaper.
However, if the left-most digit is small, people perceive they are getting a larger discount when the right digits are “small” -- less than 5 -- rather than when they are “large,” greater than 5.
“When consumers examine multi-digit regular and sale prices in an advertisement, they read those prices from left-to-right. If the left (hundreds) digits are identical, consumers will pay less attention to those digits, and instead will focus primarily upon the disparate right-most (tens and units) digits in the price comparison process.,” the authors explain.
“Our findings indicate that comparative price advertising can distort consumers’ perceptions in ways unintended by the seller.”
Unintended until they read this news article, that is.
Study: Keith S. Coulter and Robin A. Coulter. “Distortion of Price Discount Perceptions: The Right Digit Effect” Journal of Consumer Research: August 2007.