What is the $x.xx "9/10" on Gas Prices?

[S-Man]

Is that 9/10 of a cent? What is that for? Where does it go? Why don't they just round up one more tenth of a cent? Anyone know?

[carrbowl]

mess with your mind...and take your mind off the first part!!!!!!!

[CaptainTom]

$3.99.9 doesn't look as bad as $4.00

[Hanky]

Originally Posted by S-Man

Is that 9/10 of a cent? What is that for? Where does it go? Why don't they just round up one more tenth of a cent? Anyone know?

It is that which adds up. Multiply by a million a day or more and you can afford the trip to the store.

[mcphotography]

Originally Posted by CaptainTom

$3.99.9 doesn't look as bad as $4.00

exactly

[Shaggysnack]

Not to hijack this thread but...it is along the same idea, sort of...

When I fill up the tank to exactly 10.000 gallons it never seems to be the correct dollar amount. I mean, if it is $3.15 9/10 a gallon of gas, then by my gorilla math, 10 gallons should be exactly $31.59. It never seems to be right. It is always higher than that. Check it next time you fill up.

I think we are all getting hosed at the pump.(No Pun Intended)

[Roadrnr]

10 gallons, at $3.15 9/10 would be about $31.61 I believe. that's because the cost is $3.15 and 9/10ths of $.01

[AndrewCCM]

Taxes

[kenw]

ok, the .x was allowed many years ago when gasoline was in the like 19 cent/gallon range.

a LONG time ago....

the reasoning was that some leeway was needed for competition, but a full penny was often more than the entire profit margin on that gallon. In other words, at 19 cents they made 1 penny profit, but at 18 they made 0.

So if they could sell it at 18.9, that allowed some movement for competition purposes and yet still gave them some profit.

Fred moved his to 18.9, then Joe down the street moved to 18.8, and old Cutrate Clem said, "screw y'all, i'm selling at 18.7". The consumers ate it up.....

Anyway, somehow it was something that developed into the "psychological pricing" phenom (19.9 is less than 20) that we have now and the retailers haven't let go of it. With inflation and all, the .1 penny isn't the factor it used to be, but the retailer's profit is something like 5 cents a gallon or less. Depending on what old Clem does...

There's nothing to say they can't just go to full cents but they don't because the psychological pricing (it is a real marketing thing i learned in school) is very real. And because they don't have to.

fwiw, during the price controls era of the late 70s, prices could only change a finite amount, so you often saw prices of xx.6, xx.1, etc.