15 Psychological Pricing Tactics to Be Aware Of

By Jackie Lam · October 08, 2023 · 11 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

15 Psychological Pricing Tactics to Be Aware Of

Psychological pricing tactics are strategies that trigger emotions among consumers and can encourage them to shop and spend more.

For example, perhaps you’ve seen deals where prices are marked down to figures that end in .99 cents rather than a whole number. Or you’ve seen items at the supermarket that say you should compare the price to a different size package to see how much you’re saving.

The psychological impact of these maneuvers can lead you to think you are getting a great deal and head to the cashier. But you may not really be snagging a bargain and could wind up paying more than you need to.
Ready to boost your knowledge about these practices? Here, you’ll learn:

•   What is psychological pricing?

•   What does psychological pricing encourage you to spend more?

•   How can you avoid overspending due to psychological pricing?

What Is Psychological Pricing?

Psychological pricing is a sales strategy that focuses on how pricing can impact you, the shopper, emotionally and psychologically. As different prices will have different effects, these tactics can influence your spending and saving habits and get you to dole out more money. By understanding and dodging these moves, you may be able to quit spending money so freely.

💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.60% APY, with no minimum balance required.

How Does Psychological Pricing Work?

One of the main reasons why psychological pricing is so effective is that consumers rarely know how much something should cost. Instead, they lean on cues, context, and the prices of similar items to clue them in on whether something is a bargain.

These tactics can fool your brain and often offer the illusion of a deal. Unless you are an expert in supply chain finance or are a human supercomputer who can assess the total costs and lifecycle of a product, it’s hard to gauge how much something should cost.

Marketers may count on that and use it to their advantage, tempting you to make an impulse buy, even when the price is perhaps not as appealing as it may seem.

15 Examples of Psychological Pricing Tricks

Here, you can learn some of the most common tactics that can be used to encourage consumers to overspend.

1. Charm Pricing

Ever wonder why the price of that shampoo is $4.99 and not $5.00? Enter charm pricing. This technique operates using the “left-digit” bias. This means that the digit that’s leftmost in a price will impact the consumer’s perceptions the most. In other words, the number that’s to the farthest left will “charm” you into thinking the price is lower than it actually is.

In turn, a retailer will use the numbers “5” and “9” instead of rounding up the price. For example: $495 versus $500 may make you believe the price is closer to $400 than $500. Another example: $8.99 versus $9 can make you think the price is closer to $8 and not $9. You might wind up overspending and feeling as if you are bad with money afterward.

2. Odd-Even Pricing

This kind of pricing, which favors using odd numbers, is along the same lines as charm pricing. The reasoning behind odd-even pricing is odd and even numbers affect one’s perception of the value of an item.

Interestingly, prices that end with odd numbers make the price of something seem less expensive. On the flip side, prices that end with an even number or that are rounded up to a whole number seem more expensive.

3. Decoy Pricing

With this pricing tactic, you’re led to a particular choice by being offered inferior options or ones that seem “not good enough” or “too pricey.” You can think of this as Goldilocks pricing, where the middle option seems the best deal or choice.

For example, you’re shopping online for dog biscuits for your furbaby Bailey. In doing a bit of comparison shopping, you find similar boxes of pumpkin doggie biscuits; in fact, there are three different options. The least-expensive option doesn’t seem like you’re getting the best quality or the most bang for your buck, and the most-expensive option seems like you’re going overboard. So you go for the mid-priced choice. If you hadn’t been offered those three options, you might have bought the lowest-price item and been perfectly satisfied. Now, you’ve wound up overspending.

4. Buying in Bulk

Warehouse membership clubs and discount retailers are filled to the brim with buying in bulk deals. For instance, “Buy 2, Get 1 Free” or “10 for $15.” Sure, you might be saving some dollars off of the manufacturer’s suggested price, but at the end of the day, you are spending more than if you just bought a single item.

Are you really saving on a $2.50 tube of toothpaste if you spent $40 and bought more than you need? Will you really be able to eat through that 24-pack of yogurts before they reach their expiration date?

5. Price Appearance

The design or look of prices can make a difference in how it’s perceived. For instance, prices that are in a smaller-sized font and don’t have the zeroes tacked onto the end may appear less expensive. For instance, “$40” can seem cheaper than “$40.00.” Longer prices can strike us as more expensive. Why’s that? Simply because it takes longer to read them.

6. Removing a Comma

Similar to the price appearance tactic, removing a comma from a higher-priced item can make the cost seem lower than if you included that little bit of punctuation. That’s because including a comma makes the price take longer to read. If you make something phonetically shorter (i.e., it takes less time for the brain to read and process), it may trick the brain to think the price is lower.

Recommended: 5 Ways to Achieve Financial Security

7. Fake Time Constraints

These limited time offers are set up by the retailer to create a sense of urgency — all so you act quickly and part with your money. For example, you may see an offer that says, “50% off for this weekend only!” These constructed time constraints can have you moving quickly, at times impulsively, and get you to spend more.

8. Emphasis on Emotion or Nostalgia

By tapping into the allure and pull of nostalgia — an item that reminds you of your childhood or is associated with happy memories from the past — retailers can get you to part with your money. Because you long to relive those fond, happy times, you might not worry as much as the cost of something.

Similarly, tapping into a strong emotion, such as joy, family, adventure, and general warm — happy vibes, either through packaging, marketing, or brand messaging, can urge you to spend money.

9. Innumeracy

This psychological pricing tactic draws on what you might call “being bad with numbers.” Many consumers don’t have a grasp on basic mathematical principles to figure out what is a better deal when shopping. For instance, “buy one, get one free” sounds better to most folks than “two items at 50% off,” and they’ll often be convinced to buy by the first phrase.

10. Removing the Dollar Sign

Prices with dollar signs can make you feel a bit of fear or anxiety that comes with having to spend money — especially if it’s money you don’t have. Retailers often know this, so sometimes they will remove or reduce the size of the dollar sign to nudge you towards shelling out some bucks.

11. Bundling

This pricing tactic involves grouping a couple of items that go together and offering a slightly discounted price. For instance, you might see a men’s grooming kit that ends up being 25% less expensive than bought separately.

This strategy makes you feel as if you’re saving money, when in fact, you’re spending more than you need to — especially if you really only need one of the products included in the bundle. You may wind up walking out of the store with more than you intended to buy vs. using your credit card responsibly.

Recommended: 10 Signs You’re Living Beyond Your Means

12. Limits Per Customer

When limits are placed as to how much you can buy of a certain item, it tricks you into believing that the product is scarce and you’d better hurry and buy it. Or it might lead you to think the price is so low that the retailer can only offer so many at that price before they start losing money. Because of this, you might buy up to the limit so you don’t forgo a great bargain.

However, you have no proof that any of these assumptions are correct. It could just be clever marketing at work.

13. Showing the Real Price Next to the Sale Price

Also known as anchoring, this process involves showing the retail price next to a sale price to make it seem like a real bargain. For instance, seeing the sale price of $14.99 next to the full price of $19.99 can make you feel as if you are saving big (or perhaps bigger than you actually are).

By “anchoring” your decision based on the full price, the sale price will appear to be a great deal. You often see this tactic at discount grocery stores and off-price department retailers.

14. Showing the Daily Equivalence

You’ve probably come across this tactic. A company will break down the cost of a product or service per day, which makes the cost seem negligible. For instance, a $60 a month cloud storage service breaks down to $2 a day. Or a $15 a monthly streaming services subscription equates to a mere 50 cents a day.

By highlighting these daily costs, it can seem like you’re spending very little each day on a product or service. This might convince you to throw down some cash…and then regret making a bad financial decision.

15. Using Fake Reviews or User Generated Content

While there are obviously some ethical questions around this, using fake reviews can create the appearance that a product or service is getting a lot of buzz. And if something is popular, you might be enticed to jump on the bandwagon and see what everyone is talking about. It could make you buy something you don’t need, that’s overpriced, or that’s lower quality.

An influencer making a plug on a social media platform, along with viewer comments also raving about something, can also make an item seem valuable. Or some companies may reward customers with discounts if they share how great an item is. It gives you the impression that you must buy or will experience FOMO (fear of missing out), which can in turn lead to FOMO spending.

It’s wise to ask questions before making an impulse buy in this situation and to do your own research on trusted sites to evaluate products.

Can You Do Anything About Psychological Pricing Tricks?

While psychological pricing tricks are pervasive and can certainly dupe you into spending more, there are ways you can avert them:

•   Try the 30 day rule. What is the 30 day rule? If you see a pricey item you are tempted to buy but hadn’t budgeted for, make a note in your calendar for 30 days later. Write down what it is, its price, and where you saw it . Then wait 30 days. Chances are, the initial urge to purchase the items will have fizzled. If not, then you can feel reassured that it’s something you truly want and budget for it.

•   Consider the personal value of an item. Instead of fixating on the price tag of something, consider the value it would bring to your life. Is it something you would get a lot of joy from? Or something you could really use? Let that guide you vs. buying an item because it seems like a bargain or everyone else has it.

•   Figure out the number of uses of an item. If you plan on wearing a pair of jeans at least 30 times and they cost $90, that’s $3 per use. Is that something you can afford and would enjoy having? Then it might be worthwhile. But if it’s a $20 item and chances are it will most likely get shoved into the closet and ignored, that might end up being a waste of money.

•   Stick to a weekly budget. It’s no fun having to get your finances back on track after blowing your budget. Avoid that by keeping a weekly number in mind for your discretionary spending — think clothing, entertainment, eating out, hobby-related spending, and sundry items (vanilla lattes, a new conditioner, etc.). This can help you stay within your means. It could be helpful to have a separate bank account where you park your discretionary funds. It’s far easier to see exactly where your money is going that way.

The Takeaway

Psychological pricing tricks can certainly sway you to dole out more cash. That being said, if you are aware of them, you can use good judgment about these marketing tactics. That, in turn, can allow you to stay within your means, make the best financial decisions for your situation, and stay in control of your cash.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.


Is psychological pricing illegal?

Psychological pricing typically isn’t illegal, though in some cases, the tactic could veer into some other murky territory that might not be legal. But for the most part, these pricing tricks are acceptable ways of getting consumers to believe they are getting a deal or that an item is in high demand.

Is psychological pricing immoral?

There are some instances where pricing tricks border on unethical territory. For instance, using fake reviews to make a product seem more popular than it really is and to generate hype is considered unethical.

Why is psychological pricing effective?

Psychological pricing is effective because it relies on your brain making snap judgments in spending situations. These tactics can steer you toward choosing a particular product or buying more that you may truly need.

Photo credit: iStock/recep-bg

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store
SoFi Android App, Get it on Google Play

TLS 1.2 Encrypted
Equal Housing Lender