But why does this work? Psychologists say that (1) fractional pricing suggests that the seller has calculated the lowest possible price, thus the odd number, and (2) we ignore the last digits rather than mentally rounding up. Doing so allows us to justify a purchase that may be teetering on the threshold of affordability.

Neuropsychologists have confirmed that the further to the right a digit is, the less influence it has on price perception . According to this hypothesis, customers underestimate prices which lie just under round numbers.