Effects of $9 Price Endings on Retail Sales: Evidence from Field Experiments

TLDR: In this article, the authors present a series of three field-studies in which price endings were experimentally manipulated and the data yield two conclusions: first, use of a $9 price ending increased demand in all three experiments and second, the increase in demand was stronger for new items than for items that the retailer had sold in previous years.

Abstract: Although the use of $9 price endings is widespread amongst US retailers there is little evidence of their effectiveness. In this paper, we present a series of three field-studies in which price endings were experimentally manipulated. The data yield two conclusions. First, use of a $9 price ending increased demand in all three experiments. Second, the increase in demand was stronger for new items than for items that the retailer had sold in previous years. There is also some evidence that $9 price endings are less effective when retailers use “Sale” cues. Together, these results suggest that $9-endings may be more effective when customers have limited information, which may in turn help to explain why retailers do not use $9 price endings on every item.