What effect does odd pricing typically have on consumer perception?

Odd pricing typically creates an impression of lower prices. This pricing strategy involves setting prices just below round numbers, for example, pricing a product at $19.99 instead of $20.00. This approach plays on psychological pricing techniques that make consumers perceive a price as significantly lower than it actually is. The first digit in the price is often what consumers focus on, so $19.99 feels much cheaper than $20.00, even though the difference is only one cent.

This perception can influence buying behavior, as consumers may be more likely to make a purchase when they feel they are getting a bargain. Hence, odd pricing effectively communicates value, encouraging shoppers to believe they are spending less than what would be perceived with rounded pricing.