Odd-even pricing

Odd-even pricing is a psychological pricing tactic where prices are deliberately set just below a round number, such as $9.99 instead of $10.00, to make the price feel meaningfully lower than it actually is. It is one of the most researched pricing tactics in retail, and it remains widespread across grocery, apparel, and e-commerce, appearing on price tags and product pages so often that shoppers rarely notice it consciously, even though it shapes buying decisions constantly.

How odd-even pricing works

The tactic relies on how people read prices left to right and anchor on the leftmost digit, so $9.99 registers closer to $9 than $10 even though the actual difference is one cent. Odd endings like .99 or .95 are typically used for value and promotional pricing, while round or even endings like $10.00 or $50.00 are more common in premium and luxury positioning, where a precise-looking price can undercut the sense of quality. Some retailers also use .97 or .49 endings as a subtle signal that an item is on clearance, separate from the everyday .99 ending, giving shoppers a quick visual cue about where the deals sit.

The effect tends to be strongest for lower-priced, frequently purchased items, and weaker for considered, high-ticket purchases where shoppers do more deliberate comparison. That is part of why premium brands often avoid odd endings altogether, preferring clean round numbers that signal confidence rather than a hunt for a bargain at the register.

• Odd endings (.99, .95, .97) signal value and everyday low prices
• Round or whole-dollar endings signal premium or higher quality positioning
• Consistency within a category matters more than the exact ending chosen

Example

A mid-market apparel retailer tests two price points for a basic t-shirt: $20.00 and $19.99. Despite the one-cent difference, the $19.99 version converts noticeably better online, while a premium line in the same store keeps clean $45.00 and $65.00 price points to reinforce a higher-quality positioning against the value line. The retailer rolls the winning ending out across the rest of the value-tier assortment once the test confirms the lift, while leaving the premium line's round pricing untouched.

Why it matters for retailers

Odd-even pricing is a low-cost, low-risk lever that can measurably affect conversion without changing margin much, but it needs to be applied consistently within a category and brand tier, since mixing odd and round endings randomly can look unintentional or undermine a premium positioning strategy across a growing catalog and confuse shoppers who are used to a consistent pattern from one visit to the next.

How Retailgrid helps

Retailgrid can apply odd-even endings automatically as part of rules-based pricing, so every price recommendation lands on the right ending for its category and tier without manual cleanup. The AI workspace lets a merchandiser ask which categories would benefit from testing a different ending, and the price optimization software tracks conversion impact once a change goes live, so the tactic is validated with real data rather than assumption, and reverted quickly if it does not perform.