Charm pricing
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. It works in price-sensitive, value-positioned formats. In upscale rooms it does the opposite: it signals bargain, and the convention there is rounded prices with no dollar sign and no decimals.
| Format | Convention | Reads as |
|---|---|---|
| Fast casual, diner, pizzeria | $12.99 / $12.95 | Value, competitive |
| Casual full service | $13 or $13.50 | Straightforward |
| Upscale casual | 13.5 or 14 | Confident, unhurried |
| Fine dining | 14 (no symbol, no decimal) | Price is not the point |
The mechanism behind dropping the dollar sign is simple: currency symbols and decimal-heavy prices increase the salience of cost. Removing them shifts attention back to the dish. The mechanism behind charm pricing is left-digit anchoring — $9.99 is processed as "nine something" before the cents register.
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.