Decoding the Secret Language of Price Tags

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David Paul Morris / Bloomberg / Getty Images

Denim for sale at a Gap store in San Francisco in 2012.

Why do the prices at retailers like Costco and Target usually end in .99, but occasionally feature a quirky 7 or 4 for items in the clearance section? Obsessive shopping experts and store employees have been leaking the “secrets” behind these price-tag code numbers — which can help consumers tell the difference between a so-so sale price and an unheard-of bargain.

Word of how these pricing systems work has been spreading for years, via sites like Consumerist and personal-finance expert Clark Howard’s appearances on HLN. Some of these handy decoders obsessively focus on the pricing system ins and outs of an individual retailer, such as Costco or Target, while others round up pricing decoders for multiple retailers.

Lifehacker recently put together one of the more comprehensive sale-price decoders, and newspapers like the Milwaukee Journal-Sentinel published their own versions listing the pricing codes of retailers ranging from Gap to Staples.

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By comparing the price-decoding info in circulation five or so years ago with the codes zipping around the Internet lately, it looks as if retailers haven’t changed their systems at all. Going forward, as more shoppers get more of a clue about whether or not an item on “clearance” is actually a good deal, will stores keep using the same systems? Or might they mix things up to keep shoppers on their toes, and more in the dark? It’s hard to say.

But in light of how common it is for stores to try to manipulate shoppers into buying endless can’t-pass-up deals, it’s pretty easy to imagine a scenario in which a store starts messing with the numbers and codes on price tags with the hopes of convincing consumers that they’re getting monster discounts when the truth is something else.

For now at least, the consensus says that when a price tag ends in something other than .99, it’s a safe bet that the item is below full price. Beyond that, each store has its own quirky pricing system, often with some weird exceptions and caveats. Here’s a quick cheat sheet to tell if you’re getting the best price possible at a few very well-known stores:

BJ’s
Regular price: ends in .99
Cheapest price: usually ends in .00 or .90

Costco
Regular price: ends in .99
Cheapest price: ends in .97 (or sometimes .88 or .00)

Gap, Old Navy
Regular price: varies
Cheapest price: ends in .*7

Sears
Regular price: ends in .99
Cheapest price: ends in .88 or .97

Staples
Regular price: price tag has letter A, I, or P
Cheapest price: price tag has letter C or F
Target
Regular price: ends in .*9
Cheapest price: ends in .*4

(MORE: Turns Out You Only Think You’re Spending Less Money)

There’s no shortage of bloggers who cover shopping and individual retailers obsessively, so search them out for more specifics about decoding store price tags. Another option: when shopping, just ask a friendly-looking employee for insight — ideally when the store manager isn’t around.

4 comments
BunnieWalker
BunnieWalker

I work at Sams Club and our clearance pricing ends with $.01.

AndrewCLivingston
AndrewCLivingston

From a data analysis perspective, this system of pricing makes perfect sense. Say you want to see how many products sold after being finally lowered to its cheapest price (another construct that probably has the lowest possible inbuilt margin) for reporting and trend analysis purposes. I'd be surprised if there aren't more rules. I wouldn't believe for a second that anything but the .99 is a conscious effort to use numerology to drive sales.

JohnOstrowick
JohnOstrowick

Hmm. That's a singularly uninformative article. It doesn't explain the reasoning for the pricing models at all. Unless you're just link farming and want us to click the links in the article.

My understanding is that the .99 pricing started to force cashiers to open their "cash registers" (tills, we call them), so as to be forced to record receiving your money. If the amount was a flat decimal, they could pocket the money without recording it (registering it in the cash register).

My understanding of the 7 for the price of 4, and similar pricing structures, is that you're paying close to cost price but that it's a bulk deal so you still end up buying more than you actually need. It's intended to push product quantities to reassure manufacturers that their product can sell. Sometimes it's initiated by retailers, sometimes by manufacturers.

Then there's a question of "free". Well, that's so you can sample the product, right? Dan Ariely has an interesting discussion of this in his "predictably irrational". He discusses how we perceive more expensive items as 'better' even if they're not, and how we always take something "free" even if we don't want it.

Lastly, there's trickery on volumes. A lot of people don't know how to check price per volume. So they'll buy bulk (or small) because it looks cheaper, but it's not. For example, suppose some dishwashing soap is £2/L. (Just a random value, I don't know what it is in various countries). You might think it's a better deal to buy two 750mL bottles at £1.85 total because it's "cheaper" and you're getting two bottles (subconsciously equating it with 2L). But actually it's much more expensive. And sometimes retailers reverse it (perversely), knowing that you'll assume that bulk is cheaper. So they might have 2 x 1L bottles at £.85 each and 1 x 2L at £1.85. They know you're too lazy to work out if 2 x 0.85 > 1.85, so they'll score when you buy bulk on the assumption it's always cheaper. Particularly obnoxious is when they don't cite the per-volume price and leave it to you to calculate. 

goldendollar82
goldendollar82

@JohnOstrowick I can tell you as an employee of the GAP that our items that end in $.97 are 'final sale', meaning they cannot be returned or exchanged. Typically, there will be a sticker on the price tag that also says 'final sale'.