When consumerism was on the rise in the 60s and 70s, studies were done on pricing of products and buyers' psychology. They found that the mind looks at the price $3.99, and thinks $3 -- obviously less than $4. So the marketing wizards and psychology majors argued that the price should be less, without giving up too much profit.
Back home in India when I was growing up, we used to call these Bata prices. Bata is a Canadian shoe company well established in India in 60s. They brought these $19.99 or $29.99 prices with them, and included sales tax so that was the exact price you pay.
But times have changed. In today's globally connected world, consumers in back alleys of Bangalore have exactly the same information on the market as someone in Manhattan. And now most consumers are trained to look at $3.99 and immediately translate it to $4. So, my dear marketers and psychologists, you are not fooling anyone any more. Consumers have finally caught up with you!
In 2009, many shops and supermarkets in London started dropping this marketing gimmick and went straight for Round Pound campaigns. They stopped 99p sales and replaced it with L 1 sale. It was very successful. Staff at cash counters spent less time on each sale, as they didn't have to return change to shoppers. And, shoppers thought it was more honest. After all, they knew they were paying a bit more, but consumers appreciated the shop for getting rid of a gimmick.
Forty years after that theory was first developed, I ask the global consumer of today, haven't you had enough of $9.99 or worse yet, $99.99 prices? Wouldn't you rather see a straightforward price?