\t^BZ35 Hate ClloUege of ^Agriculture At (fncHcU IntJiErBita Jltlfsra, 2?. 1- ICtbrarg Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013705995 Butt ClJalUge of Agriculture Jtitara, ^. f . Odd prices and bargains in retail trade, 3 1924 013 705 995 9nbltBlr»d bg tlft T&tAvstaits at (Sinrinnati Series 11. MARCH-APRIL, 1908. Vol. IV. No.K Odd Prices and Bargains in Retail Trade By ROBERT C. BROOKS, Ph. D., Professor of Political Science, University of Cincinnati. r •■' I Issued Bi-Monthi,y. University of Cincinnati Press, Cincinnati, Ohio. Entered Pebroary 24, 1905, at Cincinnati, Ohio, as second-class matter, under Act of Congress of Jnly 16, 1894. ODD PRICES AND BARGAINS IN RETAIL TRADE Odd prices, it should perhaps be explained at once, are those seduc- tive quotations of 19, 39, and 98 cents "reduced from " that stare at us out of the show windows of every second or third store we pass and are repeated ad infinitum in their advertisements. The term is more or less technical and rather misleading inasmuch as such prices are not invariably odd in the mathematical sense, nor by any means uncommon. At bottom they are simply a shrewd retail trade device born of com- petition and a very practical if crude knowledge of the psychology of buyers. As prices of this sort represent a sophisticated form of the so- called round number tendency observable in prices, wages, and statis- tics, a brief consideration of the latter subject is perhaps in order at this point. ROUND NUMBERS AND ODD PRICES Our decimal system of notation favors the use of numbers ending in fives and naughts. There are probably many persons perfectly at ,' home in adding, subtracting, multiplying, and dividing these figures who are at least somewhat shaky with others — sevens, nines, and twelves, for example. Our currency, also based on the decimal system, ' strengthens the round number tendency. Evidences of its effect have long been observed by economists and statisticians, among whom Pro- fessor Edward D. Jones, of the University of Wisconsin, deserves special mention.^ In addition to the causes of the round number tend- ency noted above, Professor Jones points out a psychological factor of importance, namely, that "the tendency toward round numbers is toward the economy of an easily remembered and easily handled number in which to sum up a complete transaction." It occurs most powerfully among those not accustomed to accurate thinking. Even in every day matters of buying, and selling where close bargaining might not un- naturally be expected the tendency is very marked. Round number estimates "also characterize attempts to put a, money valuation upon intellectual and moral forces" — which explains their almost invariable use in fixing salaries. Bets and braggadocio are nearly always round number affairs. But quite outside money transactions the tendency is 1. See his very interesting and instructive article on Round Numbers in Wages and Prices. American Statistical Assoc, n. s. Nos. 35, 36, Sept., Dec, 6, pp. 111-130. common enough, as, for example, in sentencing criminals to terms of imprisonment, in off-hand statements of heights, distances, weights, etc. Age statistics also furnish very striking illustrations.^ A CONCRETE CASE OF ODD PRICES We have, therefore, to deal with an inveterate and wide-spread tendency toward the use of round numbers. Now odd prices are simply a device to exploit this tendency by the use of figures which suggest to purchasers the idea of reduction from former prices expressed in round numbers. This is perhaps a rather formidable way of saying what everyone must have thought who has given the subject any attention. The intricacies and subtleties of the odd price scheme are sufficient, however, to warrant a somewhat detailed discussion. With that end in view several tables were prepared based upon the advertising announce- ments of a number of stores located in places of various sizes. The one given below is selected for special consideration because it repre- sents a smaller degree of exaggeration of the odd price tendency than the others. It is based upon a pamphlet entitled "OUR GREAT SEMI- ANNUAL EVENT" (the forty-seventh of its kind, by the way), which quotes prices for a "ten days clearing sale," on each day of which goods of different departments were offered at "reduced prices." "Extensive alterations now in progress," the title page announces, "necessarily compel us to dispose of our present stock at special inducements." The store in question is located in a thriving city of about 15,000 inhabitants, and is largely patronized by faculty and students of the local univer- sity, as well as by citizens and farmers from the surrounding country. A great variety of merchandise is advertised in the pamphlet above re- ferred to, ranging from doilies at a cent apiece to rugs, furniture, and clothing running above twenty-five dollars. How large a proportion of the whole stock was offered it is impossible to say, but it must have been fairly inclusive. Often odd prices cut a much greater figure in show windows and newspaper advertisements than upon the counter, being used more to get customers inside than as a thoroughgoing policy in marking goods, but this does not seem to have been the case with the store under consideration. In the following table are shown the number of articles, without discrimination as to kind, which it offered at each price by cents up to $1.00. The accompanying diagram enables one to see at a glance what were the most popular price figures : 1. Thus according tb the Xllth Census, 1,465,256 persons in the United States were reported as thirty years old, while only 1,145,482 and 956,575 were re- ported as twenty-nine and thirty-one years respectively. Xllth Census, Vol. II Population, Part II, p. xxxvi. 4 TABLE I Number of Five-Place Number of Five-Place Cents Articles Offered Average Cents Articles Offered Averase 1... 12 51.. ... 9.4 2... 11 52.. ... 3.2 3... 61 ...32.2 53.. 4 ... 1.8 4... 28 ...31.4 54.. 2....... ... 1.8 5... 54 ...36.8 55.. 3 ...2.0 6... 8 ...31.2 56.. ... 3.0 7... 38 ...34.6 57.. 1 ... 7.2 8... 33 ...29.4 58.. 9 ... 6.8 9... , 40 ...29.8 59.. 23 ... 6.8 10... 28 ...28.2 60.. 1 ... 6.8 11... 10 ...21.6 61.. ... 6.4 12... 30 ...14.2 62.. 1 ... 2.4 13... ...20.2 63.. 7 ... 2.8 14... 3 ...19.4 64.. 3 ... 2.8 15... 58 ...17.2 65.. 3 ... 2.8 16... 6 ...20.0 66.. ... 2.6 17.., 19 ...39.8 67.. 1 ... 8.6 18.., 14 ...28.8 68.. 6 ... 8.0 19.. 102 ...29.4 69.. 38 ... 8.0 20.. 3 ...26.0 70.. ... 7.8 21.., 9 ...26.6 71.. ... 7.4 22.. 2 ... 6.8 72.. 8 23.. 17 ...13.2 73.. 4 8 24.. 3 ...11.6 74.. ... 2.0 25.. 35 ...12.2 75.. 6 ... 2.0 26.. 1 ... 9.2 76.. ... 1.8 27.. 5 ...14.6 77.. ,... 9.4 28.. 2 ... 7.8 78.. 8 ,... 8.2 29.. 30 ... 7.6 79.. 38 ... 8.2 30.. 1 ... 6.6 80.. ,... 8.2 31.. ...11.4 81.. ... 9.6 32.. ... 6.2 82.. ... 2.2 33.. 26 ... 8.6 83.. 10 ,... 3.4 34.. 4 ... 8.6 84.. 1 ... 3.6 35.. 13 ... 9.8 85.. 6 .... 6.2 36.. ... 5.4 86.. 1 ... 4.8 37.. 6 ...15.4 87.. 13 3 ... 6.8 38.. 4 ...18.0 88.. ... 5.8 39,. 54 ...13.4 89.. 11 .... 5.6 40.. 1 ...12.8 90.. 1 ... 3..0 41.. 2 ...14.6 91.. .... 2.8 42.. 3 ... 5.8 92.. 6 43.. 13 ... 6.4 93.. 2 4 44.. 10 ... 6.6 94.. 4 45.. 4 ... 7.6 95.. .... 3.2 46.. 3 ... 6.6 96.. ....14.4 47.., 8 ...11.2 97.. 14 ...14.4 48 . .. 8 ...12.4 98.. 58 ....14.4 49.. 33 ...11.8 99.. ....14.4 50.. 10 ...10.2 100.. ....11.6 POPULAR AND UNPOPULAR NUMBER ENDINGS Altogether the advertising announcement of the "Great Semi- Annual Event" contained 1537 price quotations, 338 of which were above one dollar and 81 of amounts ending in fractions. These will be referred to later. From the diagram the popularity of certain prices, as e. g., 15, o Q .0) CO O 00 o lO o VO lO o ^0 Q 9 P9 *9 £9 39 ,'^ 109 er SP ^1 5: :§; fj' ?P /9 OP ?;^ ^1 f# ^'^ /iS- ee SB iC 9P cc ^e ff ?£• , /e For ez *? ?2 /? 0? ?/ <^/ ~1 g/ #/ ?/ // 0/ s s o § § ^ 19, 25, 29, 39, 49, and 98, and the comparative neglect of others, as e.g., 26, 31, 32, 99, and 100, are plainly apparent. The tendency to avoid round numbers and the figures immediately above them and to mass on those immediately below is also evident at first glance. To measure the general strength of this tendency the following table was prepared. It shows the number of articles less than one dollar in price, barring fractional quotations, which were offered at each number-ending from one to naught. Thus the first line shows the total number of articles offered at 1, 11, 21, 31, 41, 51, 61, 71, 81, and 91 cents inclusive ; the second, at 2, 12, 22, 32, 42, 52, 62, 72, 82, and 92 cents inclusive, and so on. Numbers ending in 1, articles offered, 33; percentage total number of articles oSeieA, S.S3 " 2 ' ■■ ■' 3 •' •• 4 ■■ " 5 " .. g .. • •■ 7 " TABL E II red, 33; perc sntasre 47 114 ' 49 * 182 ■ 19 ' 105 ' 140 ' 364 45 ' 4. • 4.17 12.77 4.34 16.13 *• " 1.68 ■ > •< 9.31 12.41 ■ 1 *( 32.27 " 3.99 1128 100.00 EVEN AND ODD PRICES ' Three hundred of the articles included in Table II are offered at even number prices (in the mathematical sense), 828 at odd number prices. This seems in no way due, however, to any objection to even number prices per se (note, for instance, the large number of articles listed in Table I at 98 cents), but, as will be explained later, appears to be rather an accidental result of the odd price idea. Classifying the results of Table II, it will be observed that the popular numbers, i. e., those at which more than 10% of the total number of articles are quoted, are in the descending order of their popularity : 9, 5, 3, and 8 ; and the unpopular numbers in the descending order of their unpopular- ity are 6, 1, 10, 2, 4, and 7. In the former list the presence of one even number — 8 — and in the latter of two odd numbers — 1 and 7 — is worth noticing. As the whole price arrangement under consideration is obviously the result of a manipulation of the round number tendency it will be well to look first at the relative standing according to Table II of numbers ending in fives and naughts, and to consider later the other numbers, popular and unpopular. FIVES AND TENS In spite of the odd price tendency manifest in Table I, fives retain their popularity, taking second place in the list, while the tens, with two exceptions, are the most unpopular of all number endings. ' Above •35 cents, however, with the single exception of 75 cents, even the fives are shown little favor, taking the average of five places as an index. Thus the average of five places for forty-five cents, i.e., the sum of the number of articles offered at 43, 44, 45, -46, and 47 cents divided by five (or '3+10+4+3+8 . _|. jg 7 3^5 /pj^g assumption involved in this procedure is substantially that if thirty-eight articles are for sale at whole number prices ranging from 43 to 47 cents inclusive we might expect seven or eight of them to be offered at 45 cents. Of course this is only a rough approximation to reality ; the values of so heterogene- ous a mass of articles do not shade off gradually and regularly into each other, and in the table before us a doubly artificial grouping of prices is employed. But in spite of these reservations the five-place average does even up somewhat the exaggerated and neglected figures, and so enables us to note whether, considering the number of articles for sale at about a given price, the number really offered at that price is relatively large or small.^ Thus in the case worked out above the number of articles actually offered at 45 cents is only 4, considerably below the average of 7 3/5 for that point. The exception in the case of 75 cents, which exceeds its five-place average, and the popularity of five, fifteen, twenty-five, and thirty-five cent prices, manifested in the same way, are due, of course, to the ease of making change at these figures. Such quotations show the persistence of the round number tendency in an odd number list, and are useful, moreover, in conveying the impression to buyers that the 49 and 98 cent reductions must be genuine since other articles have not been touched by the "cut-price knife." As for the figures ending in naught, they are quoted far below the average of five places in every case except ten and fifty cents, where the number of articles offered almost exactly equals the average. Against tens, therefore, the odd price tendency reaches its maximum influence, and this will become still more evident in considering later the nines and eights. As a particularly striking illustration of the unpopularity of round numbers ending in naught it may be noted here that out of over fifteen hundred quotations not a single article is offered at an even dollar ! 1. Every five-place average contains two of the popular number endings, ex- cept twos which contain only one popular number (3), and sevens which contain three (5, 8, 9). The averages for twos are therefore too low, for sevens too high. Also the averages are heavily influenced by nines in every combination into which a nine enters, viz : sevens, eights, nines, naughts, and ones. Therefore the latter are in general too high, while the twos, threes, fours, fives, and sixes are too low. Fortunately the odd price tendency is strong enough to make these inaccuracies of little moment for the purpose of the comparisons drawn in the text. 8 THE POPUI^AR NINES Among the popular numbers the nines are preeminent, with an average of 33.37% of all quotations under one dollar. Only in the case of 99 cents does the charm fail in favor of 98. Eighty-seven, it should also be noted, is more popular than 89, possibly out of deference to the habit of reckoning in 13J^ cent shillings common still an:(ong country people of several states.^ With these exceptions the nines exceed the average of five places in every instance and also show a larger number of quotations than any of the adjacent eights, tens, sevens, and ones. The reasons for this preeminence are obvious, A figure ending in nine suggests one less than the round number imme- diately above, and it has the further advantage of being expressed in a second place digit less by one than that of the succeeding round number. It is not the ofie cent apparently saved on a 49 cent article that is so attractive, but rather the seductive sound of forty, contrasted more or less subconsciously in the mind of the purchaser with fifty. The great preponderance of nines, 'it must be confessed, gives a very arti- ficial look to the whole table and reveals pretty plainly the psychological basis on which it is constructed. THREES AND THE UNLUCKY THIRTEEN Next to the nines, although far inferior to them in popularity, come the threes with 13.77'% of all articles less than a dollar in price to their credit. Except thirteen cents only, the number of articles quoted at prices ending in threes exceeds the five-place average. On the latter basis twenty articles should be offered at thirteen cents, when as a matter of fact not one is so offered. An easy means of escape for those who might consider the number unlucky is provided by quoting goods at 13J/^ cents. Doubtless the latter figure is also favored because of the old habit of reckoning in shillings. Forty-seven articles, or more than half of all the fractional quotations in the list, are so priced. Any- one buying a single article at this figure really pays thirteen cents, without having been charged it openly, which for the superstitious may serve as a sufficient sop to Cerberus. But the crowning advantage of the fractional quotation doubtless lies in the fact that the purchaser is encouraged by the price itself to consider taking two in order "to saVe a cent." 1. Prof. J. Laurence Laughlin in his History of Bimetallism in the United States (n. p. 10) says : "The persistence, to the present day, of the units of account of a century ago, although the coins representing them have long passed out of existence, is one of the striking facts in monetary history." We have noted the popularity of nines, due to the idea which they suggest of subtraction from tens, and the question naturally arises at this point why fours, being one less than fives, do not play a somewhat similar part. As a matter of fact the fours belong to the list of unpop- ular numbers, and in every case except thirteen-fourteen show a smaller number of quotations than the preceding threes. Of course threes also suggest subtraction in most cases. One naturally thinks of twenty- three as two less than twenty-five rather than three more than twenty. So also with seventy-three, and possibly in other cases, although the writer confesses that to him fifty-three presents itself much more naturally as fifty plus three than as fifty-five minus two. Still the ques- tion remains with regard to such cases at twenty-three and seventy-three why twenty-four or seventy-four would not serve as well to attract the customer and at the same time secure the merchant an extra cent. Of course there may be some occult prejudice against even numbers, but another reason, which in the opinion of the writer may explain the preference for threes, is as follows : Throwing off one from a round number ending in naught has the double advantage, as has been pointed out, of reducing both the unit and ten digits by one. Subtract- ing one from a round number ending in five reduces the unit digit only. Possibly the suggestion of a reduction of price is so much weaker in the latter case that it has to be strengthened by throwing off another cent. However this may be, threes unquestionably are attractive price figures, although not strongly so to anything like the same extent as nines. EIGHTS AND THE NINETY-EIGHT CENT PRICE MARK Next in popularity to threes come the eights with 12.41% of the articles less than one dollar in price to their credit. There is a great dif- ference between the use of the two figures, however, in that while the threes seem mildly attractive all along the line, the eights owe their popu- larity almost wholly to the one quotation of ninety-eight cents. Except- ing in the latter case they fall behind the average of five places in seven out of nine instances. Although the sevens belong to the list of unpopu- lar numbers they nevertheless exceed the succeeding eights at seven, seventeen, twenty-seven, and thirty-seven cents. At forty-seven and forty-eight the two are even, while above this point, with the exception of eighty-seven, the eights exceed the sevens. A study of the diagram brings out pretty clearly that the eights suffer from their proximity to the nines. If thirty-nine, for instance, is a sufficiently good drawing card, why give the purchaser the advantage of one cent less in price? At ninety-nine, however, this consideration loses its weight, actually 10 not a single article in the catalogue being quoted at that figure. Doubt- less the reasoning was that one cent off a dollar would look pretty small, and that if fifty cent goods were "cut" to forty-nine cents, a price of ninety-eight cents would seem at once more fair and more plausible than one of ninety-nine cents. SEVENS AND FOURS Turning now to the unpopular numbers, it seems best to consider first the sevens and fours, the explanation of which presents some diffi- culties, and then to take up the sixes, ones, and twos, which are avoided unmistakably throughout. The tens, which also belong to the latter category, have already been discussed. Price marks ending in sevens amount to 9.31% of the total under one dollar, or slightly less than the mathematical average for Table I. The number has therefore been classed as unpopular, although this can not be insisted upon very strongly. Sevens are quoted more than twice as much as fours, which come next in the list of unpopular figures. At seven, seventeen, twenty-seven, and thirty-seven cents more articles are offered than at the preceding sixes and following eights. Above forty-seven cents, while still making a better showing than the very unpopular sixes, the sevens fall far behind the eights except in the one case of eighty-seven cents. The five-place averages are too high in the case of the sevens (see note p. 8)' to be applied without qualification, but it is at least worth mention that the actual offerings fall below them in every case except seven and eighty-seven cents, and only in the latter instance is the excess marked. An attempt has already been made to explain the popularity of the eighty-seven cent quotation, and the rela- tion of the sevens to the eights was discussed in considering the latter. In general the unpopularity of the sevens is probably due to the fact that in most cases they suggest two more than five more readily than three less than ten. Thus the suggestion of seventy-seven cents is obviously seventy-five plus two, and therefore one is not surprised to find that no articles are so marked. In the case of ninety-seven cents, on the other hand, the suggestion' is one dollar minus three cents, and fourteen ar- ticles are so quoted. Even here, however, ninety-eight is preferred with fifty-eight articles offered at that figure. Fours, as representing one less than five, might be expected to be in favor. Their percentage of quotations under one dollar, however, is only 4.34. With the exception of four and fourteen cents, prices end- ing in this figure are passed over in favor of threes, for reasons given, so far as the matter is explainable, in discussing the latter number. Thus at twenty-four cents only three articles are offered, whereas at 11 twenty-three cents seventeen are quoted. Four articles are offered at thirty-four cents, twenty-six at thirty-three cents. The difference is not so marked in the higher threes and fours, but it can be traced through- out the whole table nevertheless. THE UNPOPULAR TWOS, ONES, AND SIXES Twos are used slightly more than tens, the percentages of quota- tions under one dollar being 4.17 and 3.99 respectively. With this ex- ception, twos, ones, and sixes are the most unpopular of all number endings, ones being quoted 2.93% and sixes only 1.68% of the total number of articles in Table I. Taking the averages of five places, the only price ending in any one of these figures which shows an excess is 12.^. Above forty-one, ones are not quoted at all, and the same is true of twos above sixty-two. The reason, of course, is the same through- out ; all these numbers suggest addition, and hence an increase of price. Twenty-six cents is inevitably thought of as a quarter plus one cent, fifty-one or two cents as a half dollar plus one or two cents, and so on. FRACTIONAL PRICES AND A FRACTIONAL COIN Fractional prices quoted in the announcement of the "Great Semi- Annual Event" and the number of articles offered at each are shown in the following table : TABLE III Prices Number of Articles Prices Number of Articles i'A 1 6ii 2 21^ 2 7}4 .....6 syi 6 8^ 4 i'A 2 9V2 3 5J4 2 lOYi 1 5?4 1 1254 47 654 2 Biyi 2 The advantages of the twelve and a half cent price, which have already been discussed, sufficiently explain its prominence in the above table. Other figures that suggest the purchase of two articles to "save a cent" or for convenience in making change are two and a half, seven and a half, and thirty-seven and a half, but with the exception of seven and a half they meet with little favor. Fractions with denominators larger than four are not employed. An air of greater nicety in the application of the "cut-price knife," with possibly a hint of the exacti- ^' The five-place averages for twos are lower than they should be (see note, p. 8), but this is of little consequence, as the actual number of quotations at twos IS so small that the unpopularity of the number plainly appears even under this too favorable test. 12 tilde of the produce exchange, might be attained by the use of eights, but to this length, so far as the writer is aware^ the odd price idea has not yet been carried. It would be wrong, however, to leave this subject with the implication that all fractional prices quoted in retail trade are- artificial. In all probability the reverse is more nearly true. Owing to difficulties in calculation and making change fractions are no doubt avoided as much as possible, being employed usually in stating prices by the pound, yard, and so on where varying quantities of a goods are demanded, and where a whole number price, considering the quality of the goods, would be plainly either too high or too low. In the advertis- ing list under consideration there were altogether 339 articles at prices between one and ten cents inclusive, and of these only 31 were quoted in fractional figures. With some coin in circulation which would permit the making of change at fractional quotations it is probable that a much larger number of such prices would occur in retail trade, although the difficulty of counting with vulgar fractions which would remain would doubtless keep them below the average for whole numbers. Of course as things are now, goods are probably leveled up or down somewhat in quality and quantity to fit the usual whole number prices, but this means in effect that purchasers are sometimes compelled to take slightly more or less, better or poorer goods than would be the case with a currency system permitting finer discriminations. To many people doubtless pennies seem already a sufficient nuisance, but this is hardly the case with the small purchases of the very poor. It is perhaps also worth noticing in this connection that one effect of a fractional coin would probably be to render less popular, at least with merchants, prices like seven and a half or twelve and a half cents where the primary purpose of using them is to get an extra penny on a single sale and to encourage purchasers to take two articles. As against a fractional coin, however, many arguments can be urged. To the well-to-do the increased difficulty of making chatlge would appear not worth while. For the merchant the additional wbrk of fixing and marking fractional prices and of book-keeping would be very considerable in the aggregate. It is probable, moreover, that a fractional coin would increase the habit of odd-price manipulation of a deceptive character, particularly in the case of cheaper articles. If this were to occur, it would lead not to greater accuracy and fairness in small transactions but to directly the reverse — a consideration which seems to weaken materially the most effective argument for a fractional coin. Finally, there is no strong popular demand for such a coin, nor with increasing prices and standards of living is such a demand likely to come up in the future. Measures have at different times been pro- 13 posed in Congress for the coinage of ?J4 and J^ cent pieces, but with- out success. One recent manifestation of interest in the question is worth notice. Prior to 1902 several large retail houses in Chicago car- ried the practice of quoting goods at two and a half, twelve and a half, twenty-two and a half, thirty-seven and a half cents, and so on, to so great an extent that a demand arose for some means of making change exactly in such cases. To meet this demand these stores proposed to issue private coins of the denominations of one-half or two and a half cents. Upon inquiry to the Treasury Department as to the legal- ity of guch action they were advised against it.^ The question, of course, has not been brought to judicial decision, but according to law (No. 3, Ch. 127 U. S. Statutes at Large; No. 5461 R. S.) the issue of such coins by private parties would seem to be forbidden under severe penalties involving fine or imprisonment or both. The incident is inter- esting in more ways than one. Economists have often pointed out the influence of coinage systems upon prices, indeed the whole round num- ber and odd price tendencies are cases in point. Here we have a reverse influence illustrated — that of prices upon a coinage system. A writer in the Dry Goods Economist^ somewhat facetiously calls attention to the fact that it was in the "woolier" parts of the country and not along the Atlantic seaboard, where Anglomania is supposed to prevail, that this rage arose for imitating the farthing prices of our British cousins. Another humorist suggested that what we really needed was not a 2^4 cent but a 49 or 98 cent coin. PRICES ABOVE ONE DOL,LAR Owing to the high prices of some of the articles in the list of the "Great Semi-Annual Event" it is impossible to present the figures above one dollar in detail. As a general rule, however, the influences apparent in the price marking on the cheaper articles are clearly effective here also. Thus, omitting round numbers, the relative popularity of nines, fours, twos, ones, and sixes remains precisely the same above as below one dollar. Eights, sevens, and threes stand in that order below one dollar, while above that figure the order is threes, eights, and sevens. Tens, which were third from the bottom of the list below one dollar, are 1. For this information I am indebted to Mr. George E. Roberts, Director of the Mint. Mr. Roberts adds: "Apropos of this subject you are perhaps inter- ested in knowing that the coinage system of the Philippine government included a half centavo which would have the value of a quarter of a cent in our money, but they stopped its coinage after receiving a comparatively small number of the coins. They report that it was not a popular coin." 2. Dry Goods Economist, Feb. 1, 1902, p. 15. According to this writer pri- vate fractional coins were actually put into circulation by the Chicago stores. 14 third from the top above that price ; fives, which were second in popu- larity, fall to fourth place. Of all quotations less than one dollar, 30.1% were in round numbers; above one dollar their percentage was 33.6. To put the matter somewhat more simply: in marking higher priced articles the odd price tendency persists although with somewhat dimin- ished force, while the round number tendency becomes considerably stronger. A rather curious reason seems to be at the bottom of this phenomenon. Certain round numbers above one dollar suggest reduc- tions of price quite as strongly as do certain odd numbers less than one dollar. Thus $9.75 and $19.50 are round numbers in the sense that they are exactly divisible by five or ten, but they are none the less odd prices from the mercfintile point of view. Hence apparently the greater relative popularity of round numbers as prices become higher. The remarkable fact has already been noted that out of a list of over fifteen hundred articles not one is offered at an even dollar. It becomes perhaps even more remarkable upon observing that a very con- siderable number are priced at two, three, four, or more dollars flat. Nevertheless the attractiveness of prices ending in ninety-eight by no means disappears above the dollar mark, more than four times as many articles being so priced as at even dollars. This seems not altogether consistent on the part of the odd price maker, for if following the ratio of forty-nine to fifty he thought ninety-eight better than ninety-nine in cutting prices on dollar articles, then $4.98, $10.98, and $18.98 are not altogether convincing. "And when the policy is carried so far that a thirty-horse-f)ower automobile is marked $3,999.98, as is done in one New York department store, absurdity reaches its height."^ Without committing ourselves with regard to this particular story further than to remark that it sounds almost too good to be true, it is at least evident, judging from the frequence of the use of the ninety-eight cent ending to prices over one dollar, that some merchants regard it as exceedingly effective. CONCENTRATION UPON FAVORED FIGURES Another phenomenon that becomes more and more prominent as articles increase in price is the tendency to skip over certain figures, or, what amounts in most cases to the same thing, to concentrate quotations largely upon favored figures. Even below the dollar mark this is noticeable. It begins properly at 31, the dropping out of 13 being due to another set of causes which have already been considered. Besides 31 and 33, the following figures under one dollar are skipped : 36, 51 1. Dry Goods Economist, September 19, 1903, p. 21. 15 and 52, 56, 61, 66, 70 to U inclusive, 74, 76 and 77, 80 to 83 inclusive, 91 and 93, 94 to 96 inclusive, and 99. The break which begins at 99 cents continues until $1.10 is reached, showing how strong would be the suggestion of an increase of price if any figure slightly over one dollar, as for instance $1.05, were quoted. Three figures are skipped just above $1.35, four just above $1.30, three above $1.40, and so on, -the gaps be- coming wider and more numerous as the figures become higher. This is due in part, of course, to the smaller number of articles offered at higher prices, but there is also a psychological factor at work here. In comparing articles of small value the difference of a cent or two is often carefully weighed. This is so clearly the case with prices under fifteen cents that both the round number and odd price tendencies are some- what obscured in this part of Table I. Many alternatives for the utili- zation of small amounts of money present themselves to the prospective purchaser: petty needs are well nigh innumerable and goods to meet them are almost as great in variety. Thus a single quarter would enable its fortunate possessor to buy one or more of no fewer than six hundred and nineteen articles at the Great Semi-Annual Event under considera- tion. As figures increase, however, the ability of the ordinary purchaser at retail to measure small differences in values and prices seems to become blunted. A difference of six inches in the height of two stakes near at hand is more easily perceived than a difference of thousands of feet in distant mountain tops. So it is seemingly in price comparisons, with the result above noted that fine discriminations are not made frequently in. retail dealing with more expensive goods.^ That this psychological factor is at work in the list before us may perhaps best be shown by considering the range of prices from 51 cents to $1.50 inclusive. Alto- gether three hundred and thirty-seven articles are offered within these limits, an average of over three to each cent; Nevertheless fifty-two figures between 51 and 150 are passed over without any quotations, or, to put it in a form showing the concentration at favored points, nine figures cover two hundred and eleven out of the three hundred and thirty-seven articles offered within these limits. Of course the making of certain articles to retail at fixed prices, as for instance at $1.00, $1.35, $1.50, and so on, comes in as a factor here, but after all this only car- ries one step further back the evidence of the psychological principle at the bottom of the process. The regular prices selected for such 1. A recent study made by E. C. Levis, of Swarthmore College, of a round number price list containing over five thousand articles shows that in marking articles ranging from two to five dollars in price gradations of less than five cents are disregarded ; from five to twenty dollars few gradations less than twenty-five cents occur; and above twenty dollars few gradations of less than fifty cents or a. dollar. 16 goods, by manufacturers or jobbers it may be instead of by retailers, are based upon a very practical reading of the buyer's mind, of what will seem large or small to him, of differences in price that will be percep- tible and those that will be imperceptible to him. In practice, also, the conditions under which different retail merchants must work, or indeed under which the same merchant must work in dealing with different lines, vary so widely that the effect of manufacturing goods to sell at certain prices must be slurred over more or less. The experience of the so-called "drug trust" has shown how difficult it is to hold retailers to prices fixed in advance by manufacturers and jobbers. With all due allowances, therefore, the skipping of some figures and the bunching of large numbers of articles on others in price lists like the one under consideration occurs to an extent hardly possible if retail prices ex- pressed values exactly or if purchasfers were accurate judges of values in their higher ranges. FUNDAMENTAL IDEA OF ODD PRICES In the foregoing pages an attempt has been made to explain the ideas behind the odd price device. It is not maintained that all these are consciously held in mind and carefully weighed by the merchant in fixing the price of each article. Nor is there any such thing as an odd price code. Indeed the frequence of the different number endings varies considerably from store to store, although the principle dictating the excessive use of certain of them and the neglect of others remains at bottom the same — namely, the suggestion of reduction and the avoid- ance of the suggestion of increase of price. What constitutes the chief claim to interest of such compilations as Table I is the fact that they exhibit the resultant of a number of minds marking many articles with more or less definite ends in view, and that by tabulation these ends may be adequately brought out and their interpretation attempted. Two questions remain for consideration : first, the effectiveness of the odd price plan in attracting custom, and second, the genuineness of the reductions suggested by odd prices. EXTENT TO WHICH ODD PRICES ARE USED There is no better index to the effectiveness of any economic prac- tice than the extent to which it is employed. Unfortunately such a quantitative measure on any broad scale is out of the question in the present case. Statistics are practically silent on the immensely important interests of retail trade in the United States, and economists have given the subject far too little attention. Even if it were possible to secure an accurate enumeration of the merchants employing odd prices, further 17 questions would remain as to the volume of their business in comparison with the total retail trade of the country, the extent to which such merchants employed the odd price scheme in comparison with the whole stocks they handled, and so on. Without exact figures, however, com- mon observation will sufficiently attest the wide use of the device. As to its origin, one would think that the prevalence of the round number habit must have suggested the odd price plan to many dealers inde- pendently in different places. Mr. Isaac H. Clothier, one of the foremost retail merchants of Philadelphia, recalFs its use by certain firms of that city thirty or forty years agp. The Dry Goods Economist is authority for the statement,^ however, that the odd price scheme arose in imita- tion of a practice based on quite different principles which was inaug- urated in 1858 by R. H. Macy & Company, of New York City. In an effort to undersell all competitors this establishment adopted fixed ratios of advance over cost on the various lines of goods it handled.* Naturally odd prices resulted, in the sense, of course, that price marks often diverged from numbers divisible by fives or tens. So well did the plan work with the firm in question — due, very possibly, not so much to the odd prices as to the low figures quoted — that legions of enterpris- ing imitators got to work. The same journal from which the above statements are taken refers to odd prices as the rule today in the dry goods business, and says that they "obtain in many department stores — in the majority, would not be an exaggerated statement." In a city of over a million inhabitants with which the writer is familiar and which possesses some of the largest and most noted stores in the country two out of the five establishments which are unquestionably department stores habitually use the odd price device. A careful examination of the smaller stores in one of the down town streets of the same city including a few blocks of the cross streets above and below it showed that out of a total of three hundred and fifty-one retail establishments taking them as they came, one hundred and eleven, or 31.6%, displayed odd price signs. Of the remainder, one hundred and seventy-three dis- 1. Dry Goods Economist, September 19, 1903, p. 21. 2. Of course all merchants employ percentages of advance over cost in marking retail prices, but the innovation in this case consisted in the fact that after the necessary advance was determined the results were not "rounded off." Mr. S. H. Ditchett, writing to the author regarding the policy of a fixed ratio of advance adopted by the firm in question, says : "It should not be understood that it is adopted in every case; or in other words, where goods have been bought at an exceptionally low price the buyer for the concern would doubtless mark them somewhere near the regular seUing price, and not sacriiice a large profit where it could be obtained without injury to the general reputation of the concern for low prices." 18 played only round number prices, while fifty-five, exhibited goods in their show windows without price marks. In the following table these results are given in detail according to the various kinds of stores, those showing the highest percentage of odd prices coming first. It should be borne in mind, however, that the extent of the use of the odd price device varies widely on the part of the stores which employ it, in some cases comparatively few articles being so marked, in others every price displayed being of this character. TABLE IV ,,. , ,„ Odd Round No Price Marks Kind of Stores Prices Number Prices Displayed Millinery 6 Dry Goods 11 , 1 House Furnishings 5 1 Candy... 8 2 1 Men's Clothing ; .- 11 10 Groceries 4 4 Men's Furnishings 16 14 -2 Shoes 16' , 18 Furniture 3 1 3 Drugs 3 4 1 Jewelry 12 26 3 Tobacco 11 24 5 Hardware 1 8 11 Liquors 16 8 Men's Hats '. . . : 6 2 Miscellaneous / 4 39 30 Total Ill 173 67 Besides the streets included in the above table the writer visited two other districts. One of these, noted for the high quality of the goods sold in its stores, showed only eleven establishments using odd prices (8.8%), sixty-nine using round numbers, and forty- four dis- playing no price signs in their show windows. In the oth^r, a cheap retailing district distant about two miles from the center of the city, fully as many stores displayed odd as round number prices, while the number of stores displaying no price marks in the windows was sur- prisingly large, the figures being nineteen odd price stores, nineteen round price stores, and thirty stores without price signs. Apart from the extent of its employment the difficulties inherent in the odd price plan afford some index of its effectiveness. The added burdens of deciding upon and marking so many different prices, of making change, and of bookkeeping which it involves are in the aggre- gate so large that if it were thought they did not brih^ Veturns they would never be borne. It is doubtless ridiculous;^hat an 'afticle should appear so much cheaper when marked 49 cents than wheft/priced at an even half dollar. Yet the public is "swayed by the knocking off of the 19 pennies,"^ an air of genuineness is thereby given to a knock-down sale, "the odd cents suggesting that a horizontal discount knife has been ruthlessly supplied, leaving prices cropped at whatever point the blade has happened to touch." "Prosperous men and women think noth- ing of tarrying many minutes for the unimportant sum of two or three cents. 'It's a nuisance/ they say, 'but the money's mine, and if it is but a penny or two I might as well have it.' " While patrons are waiting for their change they are apt to look around and discover something else that they want to buy. Moreover, once the odd price policy is adopted there is danger in abandoning it. Speaking broadly, however, the device is found to work best in "popular" and neighbor- hood stores. Women are said to be more partial to it than men. Let not my masculine reader smile too soon, however. The reason why women are more attracted by odd prices than men is not that they are more easily taken in by the possibly fallacious prospect of saving a cent or two, but rather that they have more confidence in their knowl- edge of qualities and prices than have men. And most merchants agree that this confidence on their part is not altogether unjustified. To take a' recent joke of one of our comic papers seriously, women think they know (and as a matter of fact they often do know) whether the article marked 49 cents has been reduced from 50 or increased from 40 cents. Your male person, on the other hand, is inclined to look with contempt on a price that suggests one or two cents off; also he is more likely by reason of this very contempt to pay five cents, or twenty-five cents, or even many dollars more for an article than he should. In general the atmosphere of retail stores is not attractive to men ; the importance of shopping when intelligently carried on they/ scarcely appreciate; they buy where they have begun to buy, from mere chance it may have been or because of acquaintance with the dealer, membership with him in the same lodge or church or political party, or for other reasons, if they can be called such, still more vague in character. GENUINENESS OF REDUCTIONS SUGGESTED BY ODD PRICES The whole purpose of odd prices, as we have seen, is to suggest by means of carefully selected figures the idea of price reduction. How far may this suggestion be depended upon? In attempting to answer this question we should note first that odd prices are only part of a gen- 1. Dry Goods Economist, September 19, 1903, p. 21. To the same excellent trade journalvthe writei^ is indebted for much of the material in this and the fol- lowinc oaracraohs. lowing paragraphs. 20 eral plan to the same end. Readers of advertisements are familiar with the fact that in addition to quoting goods at 19, 49, 98 cents, and so on, the advertiser frequently seeks to convey the impression that reductions much greater than one or two cents have been made. The prospective buyer may take all such statements cum grano salis, and depend chiefly on the small but apparently visible reductions indicated by the odd prices themselves. Nevertheless the bargain hunter is abroad in the land, and even the most astounding of the announcements regarding "sacrifices," "slaughtered prices," and so on must find some credence. From the catalogue of the Great Semi-Annual Event the following moderate instances, which will be recognized as typical of a common practice, are taken : "40 pieces of Figured Sateen, 15c. and 18c. quality; at pc. per yard." "Heavy Madras Waistings in black and white, usually sold at 25 and 35c. Special for ipc. per yard." "At p/c. The Corset, the best world renowned corset. We will sell at 91lc. the $6.25 and $6.75 kind and the $7.25 kind. These numbers we wish to discontinue and will close them out at this price of 97c. Etc., etc." "Lot No. 5 at $14.97. We place for you in this lot our fine tailored Suits, formerly sold for $35.00, good styles. Etc., etc." Now there is nothing intrinsically improbable in any of the above statements taken separately. There are bargains and bargains as every experienced shopper knows. Many contingencies constantly occur in retail trade which enable or compel merchants to offer goods at prices below the ordinary rates. Demand fluctuates widely ; in almost every line of business there are dull seasons and dull days during which retail- ers think it wise to offer inducements in order to stimulate a sluggish buying public. Every merchant, large and small, has to dispose from time to time of "stickers" — old stocks of slow moving goods. Par- ticularly when changes of fashion occur or improvements are coming in rapidly is this bound to be the case. Manufacturers and jobbers sometimes misjudge the market and find themselves with large stocks on hand near the end of a season, or they may lose their heads even when there is no danger and let go at a reduction. In such cases re- tailers, particularly large retailers, are in a position to secure the goods on terms which enable them in their turn to sell at what are really very low rates. The purchase of bankrupt stocks, or of the stocks of concerns 21 that are going out of business, Wlso offers opportunities. Other con- tingencies are constantly occurring among the hundreds of manufactu- rers, jobbers, and retailerp. Of course in many such cases the fact that goods are offered at reduced prices may indicate that they are either damaged, out of style, or undesirable in color or in some other way. This leaves open the question as to whether the reduced prices are really low, qualities being taken into consideration. There can be no doubt, how- ever, that opportunities are often offered to purchasers to buy at what are really very favorable rates. For example, what has become a "sticker" to a merchant may satisfy a very fresh and keen desire on the part of a customer. Reductions made because of a change of fashion may mean a great deal to purchasers who care little for style. Even standard goods, as for instance silks a few years ago, may be turned out in large quantities just before a sudden falling off in demand. At such times consumers may justly consider themselves fortunate in having an opportunity to stock up while prices are low. Then, too, it sometimes happens that a certain line is sold at a reduction to serve the purpose of the bargain counter, that is, to bring a crowd which will be tempted to buy other things. The particular goods that so' to speak serve as bait may be very attractive considered separately. Finally it should be said that successful merchants are neither fools, nor do they take their cus- mers to be fools. They realize that understatement is more effective in the long run than overstatement, that it does not pay to play up small opportunities as great features, and that it does pay, most emphatically, to mean bargain when you say bargain. To be sure there are "lambs" among retail purchasers just as there are in Wall Street, with this dif- ference, however, that in retail trade the lambs do not go "broke " In the very nature of the case they must continue buying. And unintelli- gent as many buyers doubtless are, they do not always return to the places where they have been shorn. In a word, there certainly are bargains — for those who are able to perceive them — and not infrequently at that. On the other hand, there is a considerable element of deception in many offerings under this seductive heading. Even allowing fully for the various contingencies noted in the foregoing paragraph it still remains highly improbable that all the vast array of startling reductions advertised every day can be bona Me. Sometimes they measure the credulity of customers or of certain classes of customers rather than the operations of a "horizontal discount knife." The writer has been told of cases where goods have been deliberately cut into "remnants" or handkerchiefs "mussed" by being drawn through the hands. Thrown out carelessly on the counter 5uch "attractions" prove irresistible to a certain class of buyers who 32 snatch them up without examination as to quality or price, convinced from the apparent condition of the goods that they have hit upon famous bargains. Experienced shoppers can usually tell of at least a few cases that have become beneath their notice where certain goods have been boosted fifty cents or a dollar in price at special sales, the dealer doubt- less presuming on the ignorance of customers and the blasts of his ad- vertisement writei; to carry off the articles. Success in comparatively few instances of this sort would make up many actual small reductions of a cent of two to the odd price basis. In fairness it must be said, however, that the best merchants regard such practices as bad morally, or at least injudicious. Where the thing is done surreptitiously occa- sional discoveries are certain to occur, and the store is bound to suffer losses out of all proportion to the gains derived from the foolish trick. Sometimes, however, the practice is openly employed, as in the case of bargain sales held on dull days or in the mornings. In such cases every- one is given to understand that prices will be lower at the time and bigher later, and no moral blame at least can be attached to the merchant for so acting. Nevertheless this knowledge does, not soothe the ruffled temper of the purchaser who is forced to pay twenty-five cents for something his neighbor may have gotten for nineteen cents. Realizing this fact merchants generally follow the "one price policy" of holding goods at a given figure for some time. If reduction then becomes neces- sary goods are held at the lower figure until closed out, or further reductions without intervening advances are made until this end is attained. There is plenty of available evidence that some "great reductions" heralded in advertisements are really great exaggerations of very small reductions. Instances of this sort are given by the Dry Goods Econo- mist of March 19, 1904. "The writer answered an advertisement of a big department store the other day for the purpose of examining table linen advertised at 79 cents, regular price 95 cents ! The linen did not appear to be such a great bargain for the price asked, and the ticket was found to be marked '80' very unmistakably." In this case the clerk admitted that the earlier price had been 80 cents, except on one piece which had been offered originally at 95 cents, but had proved so unde- sirable at that figure that the price had to be cut. Other instances are cited by the same writer, of white goods "cut from 20 to 12>4 cents" which had never been marked above 15 cents; of blankets "reduced from $2.50 to $1.75" which had never been marked over $2.00 ; and so on. Frequently one notices the beginning of better things or at least of greater caution in the avoidance of direct affirmations that former prices were so and so, and the substitution therefor (as in some of the 23 cases cited on p. 31) of statements to the effect that "values" or "quali- ties" would justify higher prices than the ones asked. Sometimes refor- mation takes the dubious path of sweeping announcements that com- petitors can not meet the prices fixed by the advertiser. Investigation of such statements requires more time than most purchasers can afford to give, but in all retail markets of any considerable size they are simply not warranted by facts. Every wide awake merchant constantly has opportunities along certain lines — so much may be admitted — but no merchant has an absolute monopoly of such opportunities. The unceas- ing vigilance with which retail traders watch each other is scarcely known to the general public. In every large establishment there is a "Comparison Department" specially charged with this function. "Spot- ters" are constantly being sent out by the head of this department to observe the doings of competitors and daily reports of their findings are made. If a rival store offers a great bargain, samples are bought, carefully examined, even tornito pieces if necessary to ascertain qual- ities, and a corresponding or greater reduction made if thought advis- able. Under the circumstances the advertisements of merchants who claim everything all the time are more ludicrous than anything else. STANDARDS OF RETAII< BUSINESS While there is doubtless much to condemn in some of the practices cited in the foregoing pages it would be highly unjust to charge all retailers with deliberate and habitual misrepresentation. Many of the greatest success, one can say practically all the permanent successes of the mercantile world, have been made by firms which have consci- entiously avoided deception. It would be easy to mention cases of this sort in New York, Chicago, Philadelphia, and other of our large cities, but they are familiar enough without mention. Even where retail practice ia, not so scrupulous, deliberate and habitual misrepresentation can not always be charged. The truth is that many merchants of this as well as of a higher type use such terms as qualities, values, prices, etc., very loosely, and more in accordance with the customs of the market in which they happen to be doing business than with the defini- tions of economics or the canons of ethics. Not infrequently the com- munity, or a certain class of buyers in the community, is to blame in large part for the abuses which spring up in retailing. On this point the writer finds it impossible to agree entirely with a very clever authority on merchandising! who maintains that "the retailer is the King of Busi- 1. W. N. Aubuchon (Piccolo). Address at St. Louis Retail Grocers' Asso- ciation, April 6, 1905, Grocers' Review, July, 1905, p. 252, quoted from the Inter-State Grocer (date not given) . 24 ness. It's not the consumer — arguments to the contrary notwithstand- ing. It's upon the education given the consumer by the dealer that the formation of taste depends." Granting that the inifluence of the retailer is great, it still remains true that his patrons are, presumably at least, fairly intelligent grown-up persons who exercise ordinary prudence in business matters. The retailer is more active, of course, in designing and applying various plans to attract trade; but precisely the same motive as his own, namely, self-interest rightly or wrongly conceived, dictates the action of his customers in giving or withholding patronage. The latter may be careless, ignorant, or under the spell of that delusive cupidity which is always seeking something for nothing, and these con- ditions may permit or encourage merchants to employ tricky devices. Even so purchasers can hardly be exonerated from all blame for the resulting demoralized condition of the retail market. In illustration of the foregoing may be cited in numerous cases of towns and cities where severely competitive "selling campaigns" have been carried so far that in the end it becomes almost impossible to dispose of anything except with the aid of such devices as trading stamps or as bargains on one pretext or another — where the people "have been so deafened with the siren song of 'bargains,' " as one trade journal puts it, "that they don't know one when they see it." Manifestly such conditions reflect not only the char- acter of the mercantile element, but also the character of the public as retail buyers — a conclusion which need not be blinked because phenom- ena, of this sort are so exceedingly common. The following advice given to a merchant who complained of trade conditions demoralized in this manner is particularly noteworthy because of its frank implica- tion that relail trade as at present conducted is not simply a price com- petition : "It is true that the number of dry goods dealers in your city is excessive, yet reckless price competition is not the way to overcome this. Not even on the theory of the survival of the fittest can that method be justified. For, from the merchandising standpoint, the fittest is not he who gives his goods away, but he who succeeds in doing the largest trade at a good round profit. And is it not evident that greater ingenuity, closer knowledge of human nature and more intense application are needed to accomplish this than to temporarily undersell one's competitors? We say temporarily, because no merchant can maintain a cinch on the market, or continually buy at better advantage than his competitor. The wise merchant, when he sees a wave of price-cutting sweeping over his community, will dodge the competition as far as he is able. He will do all he can to impress his community that there is something more than price to be considered. He will not do this by direct statements to that effect; that goes without saying. But he will try to get a reputation for his store on something besides price, always being smart enough to create a reputation for selling as low as his competitors. He will stell staples extremely low, but on novelties he'll make enough profit to offset the loss. And he will get the people coming to him for these novelties. He'll talk style 25 and fashion in his ads, and over the counter ; he'll show the new and fashion- able things and he will have them before the other fellows get them in Stock."i Further advice along the same lines is given, but enough has been quoted to make clear the conditions which compel merchants either to cut prices extensively or to resort to other means of meeting a cut price competition. A RETAIL BUYING POLICY With such complex and often deceptive conditions existing in retail trade it is a matter of considerable difficulty to formulate a policy for buyers to pursue. Certain general rules seem fairly clear, however. It is an old maxim that nothing is a bargain which is not needed. Un- fortunately purchasers often forget this ; with many peqple buying is a passion rather than the cold calculation of the economic man. One qualification of the maxim quoted above is of some importance, how- ever. There are many regularly recurring wants which the ordinary purchaser satisfies as they reach their maximum intensity, that is, usually, in the very thick of the season. As a consequence he pays the highest retail prices for his goods. A careful study of the cycle of special sales of various sorts (for they run in a fairly regular cycle through the year) will often enable him to effect considerable savings by taking advantage of low prices during dull seasons. Another general rule for the bargain seeker is that he should consider the cost in effort as well as the money cost of the things he buys. In spite of all the devices to facilitate the examination of goods and their delivery, shopping remains an arduous occupation. Notoriously it is often carried too far. Mrs. John Lane tells the story in a recent number of an English review of a "woman of massive intellect" who saved seven pence by going to a dis- tant suburb for Brussels sprouts. As a consequence she became so exhausted that it took several days and the services of a fashionable physician to restore her. Perhaps it is because of the frequent neglect of two such obvious principles as the foregoing — namely, not to buy what you don't need and not to go to too much trouble in your buy- ing — that skepticism with regard to the existence of any such things as bargains in retail trade is so common. Often, indeed, it is the most indefatigable shopper who is most skeptical on this point, which, how- ever, merely goes to show that over-sanguine expectations lead easily to irrational disappointments. But there are also certain positive rules with regard to buying which 1. Dry Goods Economist, March 18, 1906, p. 15. 26 may serve as supplement to the preceding "don'ts." Where the sum in- volved is sufficiently large or where an article is likely to be in constant demand a careful examination of the stocks of various retailers is usu- ally worth while, whether or not any bargains are being advertised at the time. It is always of importance to ascertain and take into consideration the general reputation for honesty and fairness 'of the merchant with whom you are dealing. Fortunately information of this sort is much more easily obtained than that exhaustive knowledge of goods and values which one would require in order to be fortified against deception and overcharge. In this connection the purchaser would do well to remem- ber the principle known to economists as "the reaction of consumption upon production."^ Every purchase of goods under given conditions is a vote, accompanied by material support, to continue those conditions. The application of a little conscience in such matters would discourage tremendously many of the shady practices, now prevailing in retail trade. With regard to bargains masquerading in the guise of odd prices a rather greater degree of caution would seem advisable. Odd prices are doubtless clever enough with a rather meretricious sort of clever- ness, but this will hardly commend them to careful buyers. If certain figures are intrinsically so attractive one wonders whether the merch- ants who put their trust in such figures do not neglect other and more solid advantages which they might oflfer their customers. Reductions of a cent or two on some few articles the regular prices of which are definitely known may be bona Me, but with regard to the values of the great majority of things ofiEered for sale under an odd price scheme the ordinary purchaser is not competent to judge, and consequently is likely to be deceived. There are many reasons, as we have seen, why goods frequently have to be reduced in price in retail trade, but there is no reason at all for believing that an excessively large number of these reductions should follow in such a series as 98, 79, 69, 49, and so on. Nor can one attach much weight to the argument that odd prices attract so much additional custorn that they enable the merchant em- ploying them to purchase in so much larger quantities and to so much better advantage that he can afiford to make frequent bona Me reduc- tions of a cent or two. Retail competition is far too complex; it involves, as we have already had occasion to observe, so many factors besides price alone that the efifect of the one rather doubtful factor of odd prices, assuming other conditions equal, would count for compara- tively little. And other conditions would seldom be equal. Moreover, 1. See F. A. Fetter's Principles of Economics, Ch. 41. 27 the sort of custom attracted by odd prices and similar devices is apt to be much more fickle than that which is built up by conservative and less sensational business practices. There is always one advantage to the purchaser in looking over goods marked at round price points, namely, that he can consider alternate utilities of the various articles of about the same value he may need, undisturbed by differences of a cent or two in cost. On the other hand, if merchants string their prices up and down the scale in order to take advantage of popular figures, purchasers too often succeed in "saving" two cents on a 98 cent article they do not need at the cost of the far greater utility of a dollar article they really do need. In the long run such results are good neither for sellers nor buyers. To quote proverbs, which notoriously can always be made to contradict each other : those who "take care of the pennies" in the hope that "the dollars will take care of themselves" should remember also that there is such a thing as a "penny wise, pound foolish" policy. Retail trade may need reforming in many particulars, but such reform can only come pari passu with the reform of retail buyers. Education for giving future mothers and fathers a knowledge of articles of com- mon use, their qualities, prices, proper employment, markets wherein they are sold, and so on, is sadly needed. Until the public attains this knowledge and this point of view, odd prices and even more objec- tionable practices will continue to flourisli. 28 Oaylord Bros. Makers Syraeuse, N. Y. PIT. JM. 21, 1108