How stupid do they think we are?

[Ole Anderson]

Probably a lot of snappy comebacks to that one. But what I am referencing is selling a hot dog for 99 cents instead of a buck, a shirt for $24.99 instead of $25, a TV for $499.99 instead of $500, or a gallon of gas for $3.519 instead of $3.52. Do they really think that incremental price amount will make or break the deal? I would like to see the marketing research on that whole concept. And I would like to see more of them give the consumer credit for seeing through their ploy and stop the practice. And the rub is that they appear to think only the more sophisticated buyer (buying higher end products which don't use the 99-is-way-less-than-100 trick) can see through it.

[Leo Graywacz]

It's worked for decades. $6.99 looks better then $7.00

[Brian Elfert]

My understanding is one of the reasons this started was back in the days of everyone buying with cash or check. If something cost $5 even a clerk could easily pocket $5 and not ring it up. If it cost $4.99 they would have to open the till to get the penny. With all the sales taxes and such now this is less of an issue especially since few pay cash now.

Most large retail stores are designed around psychology and the human brain these days. Everyone knows grocery stores intentionally put stuff like milk far from the doors, but some grocery stores are actually starting to put milk and other commonly purchased items at the front of the store for convenience. I think they are finding that people will stop at the corner market for the items instead of walk all over a grocery store for a few items.

[Kevin Bourque]

Why does gas sell for $3.56 9/10 cents?

[Mike Henderson]

Most people "round" down. I've actually had someone tell me that something priced at $6.95 cost $6.

My major complaint about grocery stores is that it takes too long to check out. Sometime it takes longer to check out than to shop. That's why I always go to stores with self checkout - much faster.

Mike

[Brian Elfert]

My major complaint about grocery stores is that it takes too long to check out. Sometime it takes longer to check out than to shop. That's why I always go to stores with self checkout - much faster.


Self checkout can be faster, but you keep getting the people who have a full cart using the self checkout tying them up. A cashier can ring up a full cart way faster than anyone can at self checkout. I really wish stores would limit them to 10 items like express lanes.

[Mike Henderson]

Self checkout can be faster, but you keep getting the people who have a full cart using the self checkout tying them up. A cashier can ring up a full cart way faster than anyone can at self checkout. I really wish stores would limit them to 10 items like express lanes.
That's not my experience here. Seems that most people with a full cart do cashier checkout.

But the other advantage of the self checkout is that there's one line for at least four stations so you don't have to "bet" on who's going to finish fastest. I know stores aren't laid out for this, but cashier checkout would go faster if there was only one line. Banks, airlines, and many other kinds of stores have already gone to the single line - but not grocery stores.

Mike

[When I have to do cashier checkout, I ALWAYS get the line where the person has an armful of coupons, many of which don't apply to the stuff they bought. And when that's all finished, they pull out a checkbook and start writing a check.]

[John Coloccia]

In a lot of our stores, we have the choice between just one or two of many cashiers open or self checkout. I nearly always choose self checkout in those cases, but of course half the stuff I have needs "assistance" so much of the time the self-checkout meister just calls me up and checks me out himself. Pretty stupid, if you ask me.

When I quit to be a full time guitar builder/repair guy, one thing my company was working on was a project for Kroger. It was a scan tunnel. Put the items on the conveyor, it goes through automatically, and Bob's your uncle. That's a far better solution. I've seen self-checkouts disappear from Big-Y. I believe they've been yanked from Albertsons as well.

Incidentally, we've been doing more and more of our shopping at the local small market instead of the monster super markets. It's a little more expensive. I wouldn't buy lots of canned goods there. Their produce and meat is much freshers, though, and much is locally grown. They have a full compliment of young teens working at the checkout. There's NEVER a long line...ever. They'll even help you load your car if you want them too. I'm sure a lot of our elderly really appreciate the help, especially when it's poor weather.

Anyhow, I go to the Indian market for canned goods and some spices and I've started going there for a lot of produce too. Again, it's fresh AND it's just much cheaper too. There's never a line, and there's someone there that checks me out.

As to the OP's question:
They think the smart people will buy it because they need it, and the stupid people that think $6 and $6.99 are the same may buy it because they're stupid. There's not a lot of downside to the practice.

[John C Lawson]

The practice is based on decades of experience and any number of studies. You and I (and the rest of us) may not be deceived, but the idea is to make an impression of lower price when people are rushed and distracted. Some old-fashioned softgoods retailers will also use the penny as an indicator of markdowns, e.g. original price $10, 1st markdown $7.99, 2nd markdown $5.98, 3rd markdown $3.97, etc.
And some retailers are eliminating self-checkout not because it irritates people like me, but because the labor savings are more than offset by higher shrinkage (i.e.theft).

[Bob Turkovich]

Most people "round" down. I've actually had someone tell me that something priced at $6.95 cost $6.

Mike

I see you've met my wife. She does that everytime I ask her what she paid for something.

[Rich Engelhardt]

I despise shelf checkouts and refuse to use them on principal alone.
Every self check out register is just one less job there is and one less taxpayer putting money back into the system.

[Brian Elfert]

I despise shelf checkouts and refuse to use them on principal alone.
Every self check out register is just one less job there is and one less taxpayer putting money back into the system.

I'm not convinced they really put cashiers out of work. A grocery store might have typically had one express lane open before self checkout. Now, they have that same cashier monitoring 4 to 6 self checkout stations.

[ray hampton]

[QUOTE=John Coloccia;2003486]

They'll even help you load your car if you want them too. I'm sure a lot of our elderly really appreciate the help, especially when it's poor weather.

I do appreciate the help loading the contents of the cart into my truck [in any weather ]I NOT ELDERLY, I AM OLD
I refuse to use the self scan lanes

[ray hampton]

I know of a store owner who were selling a item and his customers complain about the price being too high so he divide the produce in half , then he divide the price in half but added a 20 percent markup to the price and his customers WERE VERY HAPPY

[Leo Graywacz]

Well, it does cost money to divide the product because to the extra labor involved and now you have twice the packaging. Seems fair to me.

The people complaining about the price and then happy in the end just can't be that bright.

[Peter Kelly]

I despise shelf checkouts and refuse to use them on principal alone.
Every self check out register is just one less job there is and one less taxpayer putting money back into the system.Add to that, checking everything out correctly is now the responsibility of consumer.

Another win for corporate America!

[ray hampton]

Well, it does cost money to divide the product because to the extra labor involved and now you have twice the packaging. Seems fair to me.

The people complaining about the price and then happy in the end just can't be that bright.

This story appear in the paper late 50's or early 60's and I believe that the store sold out of fruit [berries ] WITHIN MINUTES
and the paper slant on this story imply the same [that someone were stupid, the fruit taste much better then compare to today [calif fruit

[Brian Elfert]

I will note that in the Minneapolis/St. Paul area grocery stores do not do bag groceries or bring them to your car unless you go to the high end grocery store. In most other areas grocery stores almost always bag your groceries. People who come to Minneapolis from other areas are surprised that grocery stores don't have someone bagging your groceries.

I love self checkout at the grocery store because I am single and rarely buy many groceries in one trip. I'll do a little bit of labor in return for not waiting 10 minutes in line. Yes, you do have to set your groceries in bags, but they don't bag groceries at the regular checkouts either.

[ray hampton]

I will note that in the Minneapolis/St. Paul area grocery stores do not do bag groceries or bring them to your car unless you go to the high end grocery store. In most other areas grocery stores almost always bag your groceries. People who come to Minneapolis from other areas are surprised that grocery stores don't have someone bagging your groceries.

I love self checkout at the grocery store because I am single and rarely buy many groceries in one trip. I'll do a little bit of labor in return for not waiting 10 minutes in line. Yes, you do have to set your groceries in bags, but they don't bag groceries at the regular checkouts either.

Kentucky may not be a wealthy state but we do care for each other when we shop at the grocery store, some clerks will even help to unload your cart, the only high-end store may be "Targets" they said that they only wanted the rich to shop in their store

[phil harold]

I think the hot dog should be 94 cents plus the 6% sales tax...

[Brian Elfert]

Kentucky may not be a wealthy state but we do care for each other when we shop at the grocery store, some clerks will even help to unload your cart, the only high-end store may be "Targets" they said that they only wanted the rich to shop in their store

When has Target ever said they they cater only to the "rich"? Target is absolutely not a high end grocery store. Target is barely a step ahead of Walmart. Locally, we have Lunds and Byerlys as the two high end grocery stores. They only have stores in the Minneapolis area.

[ray hampton]

When has Target ever said they they cater only to the "rich"? Target is absolutely not a high end grocery store. Target is barely a step ahead of Walmart. Locally, we have Lunds and Byerlys as the two high end grocery stores. They only have stores in the Minneapolis area.

we got a "Target " close to a walmart and right before they open , the paper made a statement that Target intend to cater to people with deep pockets and deep pockets mean wealthy , do you consider Meijer a high -end store ? I noticed real quick the style of clothes that the women who shop Meier wore

[Mel Fulks]

I am sure you are correct about the papers statement , and sure they made it up. Might have something to do with who buys advertising . We have a nutty paper, too.

[Larry Whitlow]

I think the hot dog should be 94 cents plus the 6% sales tax...

Haven't seen 6% for a long time -- we are at 8.25% going to 8.5%. In Europe the sales or value added tax is built into the price. I bet it drives those folks nuts when they buy something here for 10 bucks and are asked to pay $10.60.

[Brian Elfert]

we got a "Target " close to a walmart and right before they open , the paper made a statement that Target intend to cater to people with deep pockets and deep pockets mean wealthy , do you consider Meijer a high -end store ? I noticed real quick the style of clothes that the women who shop Meier wore

The paper was wrong then. Target would certainly not agree with that statement. Target is headquartered locally so the local media comparison shops Target vs Walmart pretty often. The two are really close on prices. This matches my shopping experience that the prices are about the same at both. I shop Target most often only because I drive by two on the way home. There is some stuff where Walmart is cheaper, but I have to go out of my way to shop there.

We don't have Meijer here locally, but I did shop at one when I was out of town some years back. I don't remember much about it.

[Rich Engelhardt]

I'm not convinced they really put cashiers out of work. A grocery store might have typically had one express lane open before self checkout. Now, they have that same cashier monitoring 4 to 6 self checkout stations.
I am. I came from a retail background and I notice things like headcount more than the average person does.

[Mike Wilkins]

Learned the answer to that one in college marketing. It's called psychological pricing. The lower price makes the mind think it is a lower price. Your mind is tricked into thinking you are paying less for an item than you really are paying.

[Joe Angrisani]

I am. I came from a retail background and I notice things like headcount more than the average person does.

Fewer employees to run the same-sized business is a good thing. As efficiency improves the overhead improves. You'd do it with your business.

[Gary Hodgin]

"Nobody ever went broke underestimating the intelligence of the American public."

H.L. Mencken

[Rich Engelhardt]

Joe,
I disagree.
Fewer employees leads to a stagnant business that's limited in growth potential.
I see it all around me day in and day out.

[John Aspinall]

And some retailers are eliminating self-checkout not because it irritates people like me, but because the labor savings are more than offset by higher shrinkage (i.e.theft).

That might be true, but the losses from theft by workers exceeds the losses from theft by shoflifters. So if cashiers take part in worker theft, the balance could swing the other way.


In North America and Latin America, employee theft was greater than that committed by customers and gangs, and the average amount stolen by workers was more than eight times that taken by shoplifters.
Source: http://www.rfidjournal.com/blog/entry/8899
(http://www.rfidjournal.com/blog/entry/8899)
Now you do have to consider the source. That report (which I found by simply Googling "retail shrinkage statistics") is from an organization selling RFID tags for inventory control. So of course, they have a vested interest in pushing a worldview that encourages not trusting your employees. But I don't see any reason to doubt the data.

Personally, I use self-checkout, when I know my items have readable bar codes on them. I do it because it's faster. Would it be faster if everyone was trying to use self-checkout? Perhaps not. Cheers to a balanced ecosystem!

[Brian Elfert]

Going to self-checkout doesn't automatically mean fewer employees. The money formerly used to use to pay a cashier might now be paying an extra employee on the sales floor who is generating more sales.

I still maintain that a lot stores have the same number of cashiers after going to self-checkout. Many grocers only had one express lane previously. The express lane was replaced by four to six self checkouts with the same cashier who used to run the express lane monitoring the self checkouts. Now, some stores (usually not grocery stores) have gone to a model of no monitors for self checkout so help is harder to get when needed.

[John Coloccia]

That might be true, but the losses from theft by workers exceeds the losses from theft by shoflifters. So if cashiers take part in worker theft, the balance could swing the other way.


Source: http://www.rfidjournal.com/blog/entry/8899
(http://www.rfidjournal.com/blog/entry/8899)
Now you do have to consider the source. That report (which I found by simply Googling "retail shrinkage statistics") is from an organization selling RFID tags for inventory control. So of course, they have a vested interest in pushing a worldview that encourages not trusting your employees. But I don't see any reason to doubt the data.

Personally, I use self-checkout, when I know my items have readable bar codes on them. I do it because it's faster. Would it be faster if everyone was trying to use self-checkout? Perhaps not. Cheers to a balanced ecosystem!

After Big-Y removed the scanners, they said the noticed no difference in shoplifting.

[Brian Tymchak]

I heard many years ago from someone in biz that underpricing by a penny allows a retailer to make the truthful advertising claim of "under x dollars" for an item without making that big of a commitment. The thinking is that consumers react more positively to hearing their item is for sale for "under $7" vs "for sale for $6.99".

[John Aspinall]

I heard many years ago from someone in biz that underpricing by a penny allows a retailer to make the truthful advertising claim of "under x dollars" for an item without making that big of a commitment. The thinking is that consumers react more positively to hearing their item is for sale for "under $7" vs "for sale for $6.99".

I believe that. On the other hand, when I hear "under $7", I now hear "exactly 1 cent under $7".

[Rich Engelhardt]

Going to self-checkout doesn't automatically mean fewer employees. The money formerly used to use to pay a cashier might now be paying an extra employee on the sales floor who is generating more sales.Nah - cuts in store payroll go right to corporate. They aren't reinvested in the store.
A more likely scenerio is that a few hundred cashiers got the axe so corporate could upgrade all the computers to Windows 7.

[Moses Yoder]

I despise shelf checkouts and refuse to use them on principal alone.
Every self check out register is just one less job there is and one less taxpayer putting money back into the system.

My wife works at a Meijer here in Michigan (Three Rivers) and the self checkouts actually cost more labor for the amount rung up than a regular cashier lane. The store maintains them simply for customer convenience, ie not standing in line as long for a few items. In other words, a larger percentage of your bill is spent on labor when you go through the self checkout. That includes all the behind the scenes software maintenance, etc. They can hire cashiers off the street for minimum wage, but people that know how to fix those machines (skilled labor) are expensive.

My wife prides herself on her bagging skills, are we going to start a thread on that? How many of you have had raw meat bagged with your lettuce?

So far as the original question, if there is a gas station selling gas for $3.499 and one right beside it selling gas for $3.50 any bets on which one will sell more gas? I have $50 on $3.499, any takers?

[Andrew Pitonyak]

Probably a lot of snappy comebacks to that one. But what I am referencing is selling a hot dog for 99 cents instead of a buck, a shirt for $24.99 instead of $25....

A sales person quoted a price at me once time and I rounded up when I said something like "ok, so I can buy it for $25", and the sales person said "no, $24.99", and I said "$25", then they acted all indignant and said that the price was $24.99. At that point I asked "So, if I give you $25, can I walk out the door with it?", and I was told no, because I had to pay tax.... so then I said "so it is actually more than $25!".

[Art Mulder]

Learned the answer to that one in college marketing. It's called psychological pricing. The lower price makes the mind think it is a lower price. Your mind is tricked into thinking you are paying less for an item than you really are paying.


Do they really think that incremental price amount will make or break the deal?

To answer the question posed in your title, that is, "How stupid do they think we are"... You probably know the answer. Mike has the answer. I think the answer is: On average they think we're stupid enough.

I've given up being upset at the .99 price endings --- but I'm still training my kids to identify it.
What upsets me now is when they shrink the size of the product and keep the price the same.
Around here about 2 years ago all the main juice cans (Apple/Pineapple/Tomato...) dropped in size from about 1.3 liters to 1.05 liters while holding the line on the price (From 43oz down to 35oz, if my metric conversion tool is right). The insult to my intelligence is infuriating.

[Ole Anderson]

So I guess to answer my own question, they think we are very gullible if not stupid. Hey, let's do a poll on your gas station bet.

http://www.sawmillcreek.org/showthread.php?194168-How-stupid-the-poll

[Joe Angrisani]

Joe,
I disagree.
Fewer employees leads to a stagnant business that's limited in growth potential.
I see it all around me day in and day out.

Rich...

We're talking about unskilled labor here. A stagnant business would hold on to dinosaurs. A vibrant, growing business would let the jobs that can be done better by a machine be done by machine. The future doesn't look good for those with basic (or less) education and no special skill set.

And don't blame "corporate". It's all driven by the buying public and their continued Walmartification of America. Besides, I own shares of Kroger and their self checkout lanes, as well as shares of Home Depot and their self checkout lanes, making me "corporate", too. I assume many, if not most, others here do as well, in mutual funds and 401Ks.

[Brian Elfert]

If self checkouts cost more in labor than just having cashiers why not just hire more cashiers for peak periods? The "luxury" grocery stores don't have self checkouts and the lines are short because they make sure they have plenty of people trained to run registers available at peak times.

[Rich Engelhardt]

Joe,
When it comes to retail,,,,,we're talking mostly all store employees are "unskilled".
I don't "blame" corporate. I'm just stating that from my experience, when corporate needs money or needs to juggle the figures, they raid the stores.
That's just the way it is.

The future doesn't look good for those with basic (or less) education and no special skill set.That's a topic for a whole different discussion - most of which, my thoughts on that subject, violate the TOS here...

Brian,
In the past, that was possible....
The problem now is that those types of jobs go unfilled.
It's just doesn't make economic sense for the people that could fill such jobs to take them.
They make more on unemployment and/or some other form of assistance & it would cost them money to work.
Nearly half my wife's family is in that situation - working a short term job like that would interfere with their income..


Anyhow - this has drifted so far away from the OP's question it time to say good night to it...

[ray hampton]

If self checkouts cost more in labor than just having cashiers why not just hire more cashiers for peak periods? The "luxury" grocery stores don't have self checkouts and the lines are short because they make sure they have plenty of people trained to run registers available at peak times.

time for stupid question , how can I find a Luxury grocery store in my neck of the woods ???

[Brian Elfert]

time for stupid question , how can I find a Luxury grocery store in my neck of the woods ???

I don't know how you would find a luxury grocery store locally. Upscale grocery store would probably be a batter description.

We have Lunds and Byerlys locally that could both be considered upscale. Most of the locals know they are upscale and more expensive. They have carpeted floors and fancy woodwork. They also have a real butcher counter where all of the meat is laying loose in the case and the butcher wraps up your purchase. Finally, they have a lot of higher end foods that are hard to find elsewhere. I very rarely shop at those two stores unless I need something only they sell.

[ray hampton]

I don't know how you would find a luxury grocery store locally. Upscale grocery store would probably be a batter description.

We have Lunds and Byerlys locally that could both be considered upscale. Most of the locals know they are upscale and more expensive. They have carpeted floors and fancy woodwork. They also have a real butcher counter where all of the meat is laying loose in the case and the butcher wraps up your purchase. Finally, they have a lot of higher end foods that are hard to find elsewhere. I very rarely shop at those two stores unless I need something only they sell.

If a store sell live Lobsters, would you consider them a upscale store ? are mushrooms a item for the upscale store ?

[Joe Angrisani]

If a store sell live Lobsters, would you consider them a upscale store ? are mushrooms a item for the upscale store ?

Certainly not. Walmart sells live lobsters.

An upscale grocery tends to have small-label brands. Usually organic. But no big names. No Tropicana orange juice or Hunts tomato sauce or Daisy sour cream. It's going to be small, premium brands.

[Ole Anderson]

time for stupid question , how can I find a Luxury grocery store in my neck of the woods ???

If Kentucky is anything like the upper pennisula of Michigan, just look for a grocery store store where the bagger still has all his teeth.:p

Boy, did this thread ever get hijacked! Rightfully so, it would seem...

[ray hampton]

If Kentucky is anything like the upper pennisula of Michigan, just look for a grocery store store where the bagger still has all his teeth.:p

Boy, did this thread ever get hijacked! Rightfully so, it would seem...

I hope that I am wrong BUT I May hold the all time record on the creek for hijack threads

[Brian Elfert]

The type of upscale grocery store we have locally has a full line of grocery items. It is not a boutique type grocery store like Trader Joe's.

[ray hampton]

The type of upscale grocery store we have locally has a full line of grocery items. It is not a boutique type grocery store like Trader Joe's.

It been a long time since I shop at a meat store, they tend to sell what the special customer ask for, maybe one reason that upscale stores do not advertise are because to do so would be to tell the thieves to breake in

[Myk Rian]

maybe one reason that upscale stores do not advertise are because to do so would be to tell the thieves to breake in
OMG. Like thieves need advertising.

[ray hampton]

OMG. Like thieves need advertising.

Now how do you know that they do not need the number

[John Lifer]

I see you've met my wife. She does that everytime I ask her what she paid for something.

Must have met mine too:) She'll be standing with me and blurt it out loud! But it's only $6.... No it is only $7

[John Lifer]

If self checkouts cost more in labor than just having cashiers why not just hire more cashiers for peak periods? The "luxury" grocery stores don't have self checkouts and the lines are short because they make sure they have plenty of people trained to run registers available at peak times.
What are the peak periods? Want to work from 8am till 11 and from 4pm till 7pm?