Charm pricing
By Marji · Updated · Sources and editorial policy
Also called: psychological pricing · price endings · 99 pricing
Charm pricing is ending a price in 9 or 5 — $9.99, $14.95 — to signal value. Research finds a small, inconsistent lift in purchases, and no restaurant sales test was found. Many value-positioned menus use it; many upscale menus round prices instead, often without a dollar sign or decimals.
| Format | Common convention |
|---|---|
| Fast casual, diner, pizzeria | $12.99 / $12.95 |
| Casual full service | $13 or $13.50 |
| Upscale casual | 13.5 or 14 |
| Fine dining | 14 (no symbol, no decimal) |
The evidence is thin. One field study at a Culinary Institute of America lunch restaurant found guests spent more with numeral-only prices than with a dollar sign or written-out prices, and it has not been replicated. A meta-analysis of 69 studies found just-below prices raise purchases only slightly and inconsistently. The proposed mechanism for .99 endings is the left-digit effect — $9.99 read as "nine something" — which lab studies found when the left digit changes and prices are close. The menu psychology evidence review has the details.
Run the numbers
Menu price calculator
The guide that works it through
How to Price a Menu Item: Markup vs. Margin
The formula for pricing a dish from plate cost and target margin, the markup/margin confusion that underprices menus, and the three adjustments before a price goes on the menu.
Related terms
Menu price
The price a dish is sold at — set from plate cost, target margin, and what the dish is worth in the room.
Price anchoring
A price is judged against the prices next to it, not in isolation — so menu layout changes what a number means.
Decoy pricing
Adding a third, deliberately poor-value option to make the option you want chosen look obviously better.