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Research has proven people are drawn to prices ending in .99, but now it seems $5 is the new pricepoint driving shoppers to spend, reports Fast Company’s Martin Lindstrom.”More recently Google released Google Wallet, a new mobile payment system. Then it offered customers $5 compensation for the pain of having to endure a few security hiccups.
This was not long after online purchases of perfomances by comedians Louis C.K. and Aziz Ansari spiked. Each of those shows cost exactly $5. In certain instances, it appears, $5 is the new 99 cents. Or at least the price point works on a similar psychological mechanism.”
In customers’ minds, they feel like they’re spending less ($4.99 seems closer to $4 than to $5, for example) than something else that might end with an even .00.
Lindstrom doesn’t offer much of an explanation as to why $5 could sway people to spend, though John T. Gourville, a professor of business administration at the Harvard Business School, speculated in a New York Times article last year it may be because people love to buy in increments—that is, buying five of something for $5.
What are your thoughts? Would $5 sway you to spend?