Blog 99

We are pleased to let you know that we have always done just as you have requested – we do not round to the nearest cent as each item is rung up.  Rather, we do, as you suggest, round only on the total, overall amount of the entire transaction in the aggregate, so that each 1/100 cent savings on every individual item keeps adding up as each additional item is scanned at the register.  For example, when customers purchase 51 tax exempt items (such as food), their total price is $50.99, not $51.00.  In fact, although the exact, four digit price in the example is $50.9949, when we convert this 4 digit number to the actual 2 digit sales price, we round this down to $50.99, using the common rounding principles that we all learned in grade school (.5 or greater rounds up, less than .5 rounds down).  However, because many items are taxed, and because taxes themselves are usually in fractions of a cent (such a 9½¢ per dollar), the benefit of our 99/100¢ pricing verses rounding up to the next whole cent is actually often realized even on far smaller purchases.  For example, where the sales tax rate is 9¼¢ per dollar, our customers would pay $2.18 for 2 taxable items sold at $0.9999 each, yet if we charged $1.00 each instead, the price would be $2.19.  In fact, where the sales tax is 9½¢ per dollar, just 1 single taxable item at 99.99¢ would cost $1.09, but at $1.00 per item, it would cost $1.10 rather than our cost of $1.09.  So while of course most sales round up, when we did a random audit of 5 stores in 3 counties for the month of December 2008, we found that after examining more than 200,000 transactions, on 21.64% of the transactions, our customers paid less with our 99.99¢ price than they would have if we charged $1.00.     

 

Our policy is explained in detail on our website, www.99only.com, which we encourage you to visit.  

 

We should also let you know that this policy is not new by any means, and has been in place since the summer of 2008, and it was very well publicized before it began.  Who holds a press conference to announce a price increase?  We did, however, just to be certain it was well publicized so our customers would know what we were doing, and many local as well as national TV, radio, and newspaper outlets covered the price increase story.  It made news from London to Beijing, not to mention throughout the US.  We also took out newspaper ads and placed 2 by 3 foot signs in our store windows explaining the change.  In addition, our prices are well marked in our stores, on the shelves, at the register, on our in-store flyers, and on our cash register receipts.  They are also announced many times each hour on our pre-recorded public address system, as those who have visited our stores well know. 

 

Inflation caused the famous Woolworth’s Five and Dime stores to eventually charge more than the price set forth in their name.  They kept their Five and Dime name even as rising prices left them no choice but to charge well in excess of 10¢.  They did this not because people were unaware of their changing prices, but so their customers would know who they were.  This is especially important for us because of all the knock-offs and imitators who already try to pretend to be us and confuse our customers into thinking they are the real thing.  Just as with the Five and Dimes, and just as most “dollar” stores no longer charge only a dollar for most of their merchandise, and Dollar Rent a Car certainly offers no car rentals for a dollar, and Motel 6 abandoned its nationwide $6 a night room charges, we were compelled to raise our prices ever so slightly, but we kept the increase to the barest minimum, and we did everything imaginable to make the public aware of this before the fact, and at all times since. 

 

We are proud that in over 28 years, we have raised our primary price point by no more than one cent, from $0.99 to $0.9999.  Our goal is to offer our wonderful customers at least a good and often a great value on everything we carry, and whether at 99¢ or a penny more, we believe our values can’t be beat, and our values are offered on everything in the store, not just on a few advertised items designed to draw you in and then overcharge you for everything else.  We don’t play that cynical game.  Our prices, which are well publicized, are excellent across the board.

 

 

99¢ Only Stores