What is Odd Even Pricing? A Complete Guide

Odd even pricing is a common pricing strategy used by retailers and e-commerce businesses It refers to setting prices at amounts ending in odd numbers, like $999, or even numbers, like $10. This subtle psychological tactic can influence customers’ perception of value and willingness to buy. In this comprehensive guide, we’ll explain what odd even pricing is, the history behind it, the psychology of how it works, pros vs cons, and tips on how to implement odd or even pricing strategies.

A Brief History of Odd Even Pricing

Odd even pricing has been around for over a century. One of the first documented uses was by F.W. Woolworth who opened his “Great Five Cent Store” in 1879. All items cost either 5 or 10 cents. This created an impression of affordability and bargains.

Later in the early 1900s, more retailers adopted odd pricing endings like $0.99 or $0.95. The reason was partly to force cashiers to open registers to make change, preventing theft. But retailers also noticed odd prices increased sales.

Over time, research showed that odd and even prices influence buyer psychology differently. Odd prices feel like deals while even prices convey premium value. Companies now use odd even pricing strategically based on their brand positioning and target customers.

The Psychology of Odd vs Even Pricing

The last digit of a price has a strong psychological impact on how buyers perceive value. Let’s compare the differences:

• Odd pricing (e.g $9.99) Odd cents endings like 99 or 95 cents make prices feel substantially lower The reason is that shoppers focus more on the left digits rather than the right. So $9.99 is perceived closer to $9 rather than $10. This creates an impression of a bargain or discount.

• Even pricing (e.g. $10.00): Prices ending in 00 or multiples of 5 feel complete. Even numbers are associated with quality, prestige and precision. So $10.00 feels more polished than $9.99. Even pricing works well for premium brands.

Research on the psychology of pricing shows that odd numbers focus attention on the dollars while even numbers focus on the cents. Retailers leverage this quirk of buyer psychology to influence perceived value.

How Odd vs Even Pricing Impacts Brand Positioning

The choice of odd or even pricing can reinforce brand positioning:

• Odd pricing for value brands: Odd numbers like $29.99 are best for brands competing on price or offering deals. The unfamiliar numbers make comparison harder so buyers focus on the left digits. Odd pricing promotes bargains.

• Even pricing for premium brands: Whole numbers like $30.00 boost perceptions of quality. The rounded numbers feel complete rather than arbitrary discounts. Even pricing reinforces premium value.

• Using both: Some brands use odd pricing for sales or budget items and even pricing for full-priced or premium items. This lets them appeal to diverse customer segments.

Now let’s look at some examples of odd and even pricing in action.

Odd Even Pricing Examples

Men’s Wearhouse: Odd Pricing

Men’s Wearhouse, a discount men’s retailer, uses odd pricing for clearance items like these sport coats. The odd $109.99 price ends in an unusual 99 cents to emphasize the discount and drive sales.

![Men’s Wearhouse Odd Pricing Example][]

Brooks Brothers: Even Pricing

Brooks Brothers sells premium men’s clothing and uses even pricing like $598 to project prestige. The rounded whole number pricing avoids any perception of arbitrary discounts.![Brooks Brothers Even Pricing Example][]

Mattress Firm: Mixed Odd and Even Pricing

Mattress Firm sells mattresses at all price points. For higher end options they use even pricing like $1,599 to boost perceived quality. For budget options they use odd pricing like $219.99 to emphasize affordability.![Mattress Firm Odd and Even Pricing Example][]

This shows how adjusting the last digit can reinforce branding and target different customer segments.

When to Use Odd vs Even Pricing

Should you use odd or even pricing? Here are some guidelines:

• Use odd pricing if you… – Sell discounted or budget-friendly items – Want an affordable price image – Target value-conscious buyers – Offer sales promotions frequently
• Use even pricing if you… – Sell premium products or services – Want a luxury or prestige price image – Target high-end market segments – Avoid frequent discounts and sales
• Use both odd and even pricing if you… – Have a diverse product range and buyer base – Offer both discounted and premium items – Want to segment your product tiers

Now let’s go over the pros and cons of odd and even pricing strategies.

Pros and Cons of Odd vs Even Pricing

Pros of Odd Pricing

• Encourages impulse purchases
• Higher sales of discounted items
• Perceived as better value for money

Cons of Odd Pricing

• May undermine premium brand image
• Attracts deal-focused customers with lower lifetime value

Pros of Even Pricing

• Reinforces premium brand image
• Attracts high-end customers
• Perceived as better quality

Cons of Even Pricing

• Reduces impulse purchases
• Lower sales of non-discounted items
• Less price-conscious buyers may still negotiate

How to Implement an Odd or Even Pricing Strategy

Here are some tips on how to effectively use odd or even pricing for your business:

If using odd pricing:

• End prices with 99 or 95 cents to maximize the discount effect
• Put odd prices on sale items, bundles, and budget products
• Use odd pricing on landing or product pages promoting deals
• Communicate savings % to reinforce the discount message

If using even pricing:

• Price premium items in multiples of 5 or 10
• Maintain even pricing for signature products year-round
• Consider even pricing on website pages promoting premium offerings
• Emphasize product qualities rather than price savings

If using both odd and even pricing:

• Use odd pricing for economy and even for premium product tiers
• Show odd pricing on category pages and even pricing on product pages
• When discounting premium items, adjust to odd pricing
• When repricing budget items, switch to even after discounting period

Odd and even pricing are simple but powerful strategies that tap into buyer psychology. Odd pricing reinforces affordability while even pricing projects prestige. Smart retailers use odd or even numbers strategically to influence perceived value.

Hopefully this guide gave you a solid understanding of what odd even pricing is, its history and psychological impact, when to use it and real examples. Just changing the last digit based on your goals and customers can refine your pricing strategy. But be sure to test different versions to see what resonates best in your market.