Psychological Pricing: 10 Strategies to Boost Sales (2025)

Today, pricing psychology is no longer about simply rounding down to $9.99. It’s evolved into a nuanced strategy powered by AI, real-time data, and shifting consumer expectations. With inflation still impacting everyday spending and shoppers becoming more value-conscious, brands are rethinking how they price their products to win trust and stay competitive.

The truth is, most of us don’t really know what things should cost. You might feel good snagging a jar of marinara sauce for $7.99 at an organic grocery store until you spot the exact same jar on sale elsewhere for $5.99. 

Pricing can influence how people perceive your brand, signal quality, or align with your values. And when used strategically, it can nudge customers toward buying, subscribing, or spending just a little more on your brand.

In this guide, we’ll break down what psychological pricing really means, why it works, and how you can use it (ethically!) to strengthen your marketing and meet changing consumer behavior trends in 2025.

What is psychological pricing?

Psychological pricing is a marketing strategy that leverages consumer psychology to influence purchasing decisions by setting prices that appear more attractive. For example, using charm pricing (like $9.99 instead of $10) or bundle pricing (offering multiple items at a lower combined price) can effectively encourage customers to buy more and perceive greater value.

Why psychological pricing is effective

In his book Priceless: The Myth of Fair Value, William Poundstone writes, “Marketers had long been doing experiments in the psychology of prices. In the heyday of mail order, it was common to print up multiple versions of a catalog or flyer in order to test the effect of psychological pricing strategies. These findings must have dispelled any illusions about the fixity of prices. Marketers and salespeople knew too well that what a customer was willing to pay was changeable and that there was money to be made from that fact.”

Here are a handful of reasons why psychological pricing strategies work so well. 

It takes advantage of our fuzzy pricing knowledge

Psychological pricing plays on the fact that consumers rarely know what something should cost. Most often, the way we’re able to determine if something is a good deal is by getting it cheaper than normally listed or by comparing it to similar products in the same category. 

It makes comparing products easier

When prices are set in a certain way, it’s simpler for shoppers to compare different options. They can quickly glance at prices and get a sense of which one seems like a better value, without having to do much math in their heads.

It’s flexible and can be adjusted

Sellers aren’t stuck with one price forever. They can play around with different psychological pricing tactics to see what works best for their customers and their bottom line. What people are willing to pay can change, so prices can too.

It uses simple tricks that fool our brains

Our brains can easily be tricked by small changes in price. For example, seeing something priced at $9.99 instead of $10 makes us think it’s a lot cheaper. Our minds tend to focus on that first number, even though the difference is just a penny. 

It makes us feel smart and successful

Shoppers like to think they’re getting a good deal. It makes them feel smart and successful, like they’ve outsmarted the system somehow. Psychological pricing strategies play into this desire to make smart choices and come out on top.

It can signal quality or value

Sometimes, the price of something can give hints about how good it is. A higher price might make shoppers think a product is better quality, while a lower price might make them feel like they’re getting great value. Either way, it helps consumers feel like they’re getting the best option.

It’s been tested and proven to work

Marketers have been using these pricing tricks for a long time—they wouldn’t keep doing it if it didn’t work. They’ve tested these psychological pricing methods over and over, and they keep using them because they’re effective at influencing what shoppers buy and how much they’re willing to pay.

💎 Intelligems tested 811 price runs and found that the median brand saw a 6% lift in gross profits when they optimized pricing. 

10 types of psychological pricing

If using a .99 in your list prices doesn’t feel like the right move for your brand, there are several other strategies you can use. 

The different types of psychological pricing tactics include:

1. Charm pricing and odd-even pricing
2. Slashing the MSRP
3. Artificial time constraints
4. Innumeracy
5. Price appearance
6. Flat-rate bias
7. Bundle pricing
8. Freemium pricing
9. Dynamic pricing based on customer behavior
10. Subscription pricing psychology

1. Charm pricing and odd-even pricing

Charm pricing, the most heavily taught psychological pricing strategy, removes one cent from the rounded dollar price of an item to trick the brain into thinking it costs less. So if $4 becomes $3.99, the customer is more likely to see and remember the $3, instead of rounding up to $4. 

A similar practice is odd-even pricing, which essentially means customers purchase items that end in an odd number more often than they purchase items with an even number. 

For example, Ruggable uses charm pricing—all of its product prices end in a 9. 

How to implement charm pricing:

1. Identify your key products or services.
2. Adjust prices to end in .99 or .95 (e.g., $20 → $19.99).
3. Test different odd-ending prices to see what converts best.
4. Use charm pricing consistently across product pages for cohesion.
   

💡Quick implementation tip: Update your most popular product prices to end in .99 and monitor the conversion rate for 30 days.

2. Slashing the MSRP

Manufacturers usually set a manufacturer’s suggested retail price (MSRP) for items that will be sold across many different ecommerce or retail stores. This is the price you’ll often see on a standard price tag for, say, a book or a car. 

Some businesses may choose to sell right at the MSRP, but others show the MSRP next to the lower price they’re selling the item for. This is a psychological pricing tactic commonly used in outlet stores. A shop might run a 40%-off the MSRP sale and offer an extra 30% off certain items, so a purse listed at $298 MSRP ends up costing $54 instead. 

These businesses use the MSRP psychological pricing strategy as an anchor to make customers feel like they’ve actually saved money on an item, even if the reality is a little more complex than that. For ecommerce shops, the MSRP might be crossed out with the new price next to it, a similar signal of savings. 

How to slash the MSRP:

1. Display the MSRP visibly alongside your current price.
2. Highlight the savings (e.g., “Save $30” or “40% off!”).
3. Use strikethrough formatting for the MSRP and a bold, attention-grabbing font for your price.
4. Consider timing these markdowns around peak shopping periods.
   

💡Quick implementation tip: Create a “Compare at” section on product pages to show MSRP savings without changing your entire pricing model.

3. Artificial time constraints

One day only! Only a few hours left! Early bird sale! It’s common for businesses to use artificial time constraints to create a sense of urgency. Single-day events or sales that end within a few hours encourage customers to make purchases quickly—before the sale ends or before their favorites sell out. 

While the messaging on a business’s website might say that the sale is ending, the truth often is that it’ll reset in a few hours and keep running. The trick with this psychological pricing strategy is to make customers believe the ending is impending so they make a purchase right away.

How to implement artificial time constraints:

1. Set a clear time limit on a discount or promotion.
2. Use countdown timers or “Sale ends in…” messaging on product pages.
3. Promote urgency in email campaigns and banners.
4. Rotate offers regularly to keep the pressure fresh.
   

💡Quick implementation tip: Add a countdown timer to your website’s homepage or product pages using a Shopify app.

4. Innumeracy

If you know the old saying “six of one, half a dozen of the other,” innumeracy is similar. Innumeracy strategies take simple math and choose the option that’s more appealing to a customer. 

For example, a box of penne pasta might be on sale for “50% off when you buy two.” Next to it, a box of penne from a different brand could be “buy one, get one free.” The buy one, get one free option actually sells better. Even though the math is exactly the same, customers feel like it’s a better deal.

How to implement innumeracy:

1. Reframe discount messaging (e.g., change “50% off two” to “Buy one, get one free”).
2. Test different versions of the same deal across customer segments.
3. Use simpler, more emotional language (“free” outperforms percentage discounts).
   

💡Quick implementation tip: Wherever possible, swap out “50% off two” with “Buy one, get one free” and track which version gets more clicks or conversions.

5. Price appearance

Did you know that the way a price appears can influence the way your customers feel about it? Ditching the cents—even if it’s zero cents—makes people feel like they’re spending less money. Indeed, $12 feels cheaper than $12.00 because the number itself isn’t as long. 

How to implement price appearance:

1. Drop unnecessary decimals (e.g., $12.00 → $12).
2. Keep your prices clean and short in promotional materials.
3. Make sure your pricing fonts are clear and easy to read, especially on mobile.
   

💡Quick implementation tip: Update your product pages to remove “.00” from whole-number prices.

6. Flat-rate bias

Flat rates make things easier in a lot of situations. For example, when planning a vacation, you might consider staying at an all-inclusive resort versus one that doesn’t offer a package. 

Piecing together the vacation may be cheaper in the long run, but the flat rate is easier to predict and feels more stable than an a la carte option, even if it’s more expensive. Studies cited in William Poundstone’s Priceless found this to be true: “Consumers like flat rates, even when they cost more.” 

How to implement flat-rate bias:

1. Offer simple, all-inclusive pricing where possible.
2. Promote packages or flat rates over a la carte options.
3. Emphasize predictability in your messaging (e.g., “One monthly fee, no surprises”).
   

💡Quick implementation tip: Bundle your services or shipping into one flat monthly fee and use the phrase “no hidden costs” in your pitch.

7. Bundle pricing

Bundle pricing offers a group of products or services at a lower price than if you bought each item separately. This strategy works because it makes customers feel like they’re getting a better deal. 

For example, a fast-food restaurant might offer a meal deal that includes a burger, fries, and a drink for a set price, which is cheaper than buying each item individually. This not only encourages customers to buy more but also makes them feel like they’re saving money.

So, why does bundle pricing work so well? First, it simplifies decision-making for customers. Instead of choosing each item separately, they can quickly see the value of the bundle and feel confident in their choice. But it also taps into our desire to get more for less, making us feel like we’re making a smart purchase. This positive feeling can lead to more sales and better customer satisfaction levels, as people enjoy the experience of getting a good deal. 

How to implement bundle pricing:

1. Identify products that are often bought together.
2. Create bundles with a discounted price versus buying each separately.
3. Display the total savings clearly on the bundle product page.
4. Test different combinations to find the most appealing bundles.
   

💡Quick implementation tip: Add a “Bundle & Save” section to your site using your top three products to create instant perceived value.

8. Freemium pricing

Freemium pricing offers a basic version of a product or service for free while charging for more advanced features or a premium experience—a bit like getting a free sample at the grocery store, but for digital products. 

The idea is to hook users with the free version and then convince them to upgrade later. For example, Spotify lets you listen to music for free with ads, but if you want to skip songs an unlimited number of times or download music for offline listening, you need to pay for the premium version.

This approach works because it plays on our natural curiosity and our love for free stuff. People are more likely to try something if it doesn’t cost anything upfront. Once they start using the free version, they might realize how useful it is and be willing to pay for more features. 

The freemium pricing model is also a great way to build trust with customers. By letting people use the basic version for free, you’re showing confidence in your product. Plus, it fosters a sense of reciprocity—the shopper has got something for free, so they might feel more inclined to pay for the premium version later. 

How to implement freemium pricing: 

1. Offer a basic version of your product or service for free.
2. Clearly list the features included in both free and premium plans.
3. Nudge users to upgrade with time-based or feature-based prompts.
4. Use email sequences or in-app messages to highlight the benefits of upgrading.
   

💡Quick implementation tip: Highlight your premium tier’s most attractive feature and show what users are missing out on in the free version.

9. Dynamic pricing based on customer behavior

Thanks to the sheer amount of data available now, you can adjust prices in real time based on how people interact with your site, what they’ve browsed, or even how long they’ve lingered on a product page. 

For example, if someone keeps coming back to look at the same pair of shoes but hasn’t hit Buy yet, you might offer a small discount or free shipping to tip them over the edge. Or if a customer regularly shops at the same time each week, pricing can be optimized to match those patterns and maximize conversions.

If the price feels tailored to them, whether it’s a limited-time offer or a nudge based on their habits, people are more likely to act fast. It creates a sense of urgency and personalization that can increase both trust and sales (as long as it doesn’t feel creepy or manipulative).

How to implement dynamic pricing psychology:

1. Use AI tools to track customer behavior (e.g., how often they view a product, time spent on site).
2. Set up automated pricing rules (e.g., offer 10% off if a user visits the same product page three times).
3. Use personalized offers via email or on-site banners.
4. Monitor the impact on conversions and tweak as needed.
   

💡Quick implementation tip: Try a tool like Intelligems or Prisync to run a dynamic pricing experiment on one product category.

10. Subscription pricing psychology

Consider this example: Instead of paying $30 every time you order a box of coffee pods, you’re offered a subscription for $25 a month with free shipping and a little bonus thrown in. It feels like a no-brainer. 

That’s because subscriptions pull a few key psychological levers:

• Commitment bias. Once someone signs up for something, they’re more likely to stick with it. Subscriptions turn occasional buyers into repeat customers without any extra effort.
• Perceived value. Packaging products or services into a subscription “bundle” makes people feel like they’re getting more for their money, even if they’re paying slightly more overall.
• Reduced decision fatigue. No one wants to think about reordering the same thing every month. A subscription takes the mental load off, which feels like a win.
• The sunk cost effect. Once a shopper pays for something monthly, they’re more inclined to use it (“I’m already paying for this app—I should do that yoga class today”).

You can also use tiered pricing to subtly guide people toward the “best value” option because it makes the middle option look like the smartest choice.

How to implement subscription pricing: 

1. Create tiered subscription plans with increasing value.
2. Highlight the “best value” option visually (e.g., with a badge or different color).
3. Offer perks like discounts, free shipping, or early access to sweeten the deal.
4. Reduce friction with easy sign-up and cancellation processes.
   

💡Quick implementation tip: Add a comparison chart that clearly shows what users get with each plan and emphasize the middle tier as the best value.

How to infuse psychological pricing principles into your marketing strategy

While psychological pricing can be a lucrative way to determine how much the items you sell should cost, it can also be part of your brand’s wider marketing strategy. 

Use higher price points as quality signals

The way you price your products can significantly impact a customer’s perception of quality.

Higher prices (also known as prestige pricing) give the impression that an item is worth more, even if it’s made by the same manufacturer or with the same materials.

Take this example: In an episode of the early 2000s Disney Channel television show Kim Possible, Kim falls for a pair of boots significantly more expensive than the same pair at another shop. Club Banana, a shop owned by the same proprietor as the other shop, Smarty Mart, marked up and renamed Smarty Mart’s black pair of boots as “onyx” to better fit in with other designer items at a similar price point. 

This is a popular pricing strategy that businesses use to signal that their items are luxury or designer pieces. Customers see an expensive price tag and assume the items are of the highest quality possible. Even if that is true, it doesn’t mean that the cost reflects what the items are actually worth. 

For example, CO Collections offers beautiful clothes and accessories at luxury prices. Featuring cashmere coats and sweaters, bags made of Italian lambskin leather, and linen jumpsuits, the brand’s main line is “an exploration of dramatic proportion and rich textures with a focus on emotion and seasonality.” While the $1,095 price of a cable knit cashmere sweater might discourage some buyers, CO uses price as a strategy to attract those looking for clothes focused on luxury and great design. 

On the flip side, cheaper items signal that they’re lower in quality, even if they’re not. In Priceless, Poundstone mentions that the Hollywood Bowl concert venue in Los Angeles sells tickets to its summer concerts for a dollar. Even though the seats come with a better view of the city, prime sunset viewing, and acoustics the same as more expensive seats below, they’re often empty because the low price tag makes people believe the seats are terrible.

💡 Tip: Whether you opt for higher prices or want to go the affordable route, it’s important to remember that your prices impact the way your customers perceive the quality of your products, even if you mark them up with a traditional pricing formula.

Be transparent to build trust

Being open about your pricing can be a smart move because it shows your cards to customers and lets them see exactly what goes into the cost of your product. Consumers typically respect that kind of transparency. So break it down for them: how much you spend on materials, what you pay your workers, and even how much it costs to ship the stuff. 

This approach works really well if you’re selling fancy stuff for less than the big designer brands. You’re basically saying, “Hey, look, we’re giving you the same quality as those expensive guys, but we’re not charging you an arm and a leg for it.” People appreciate this honesty. It makes them feel like they’re getting a good deal.

Being transparent about your pricing can fit into your bigger marketing picture in a few ways. First, it helps build trust with your customers. When people feel like you’re being straight with them, they’re more likely to become loyal fans of your brand. This strategy also sets you apart from competitors who might be keeping their pricing strategies hush-hush. Plus, it can spark conversations about your brand—people might share your pricing breakdown with friends, giving you free word-of-mouth marketing.

But remember: This strategy isn’t for everyone. It works best if you’ve got a good story to tell about your pricing, like how it vibes with your brand values. Maybe you’ve found a way to cut costs without sacrificing quality, or you’re passionate about fair wages for workers. Whatever it is, make sure your transparency aligns with your overall brand messaging. 

Offer pay-over-time options to ease sticker shock

Let’s face it, big price tags can scare people off. But there’s a clever way to make those pricey items seem more affordable: offering pay-over-time options. This is where you team up with partners like Shop Pay to let customers spread out their payments into multiple installments over the course of weeks or months.

Instead of paying $1,000 all at once, a customer might pay $250 every two weeks. Suddenly, that expensive thing doesn’t seem so out of reach. The price hasn’t changed, but it feels way more doable.

This buy now, pay later (BNPL) method works well for a number of reasons:

• It makes your products more accessible. You’re not just selling to people with deep pockets anymore. Now, folks on tighter budgets can afford your stuff too.
• It can boost your sales. When people see they can pay bit by bit, they’re more likely to hit that Buy button. They might even buy more expensive items than they originally planned.
• It’s a great selling point. You can advertise that you offer this option, which shows you understand the current financial struggles many consumers face.
• It can set you apart from competitors. If other businesses in your field aren’t offering this, it gives customers a reason to choose you instead.
• It can help build customer loyalty. People appreciate flexibility when it comes to paying. If you make it easier for them to buy from you, they’re more likely to come back.

It’s important to be clear about how BNPL options work. Make sure customers understand the terms—you don’t want anyone feeling tricked or confused about what they owe for their purchase.

Use AI tools to optimize and personalize pricing 

AI is a powerful tool for putting psychological pricing into action. You can analyze customer behavior in real time and adjust prices or offers based on what’s most likely to convert.

Let’s say someone visits your site regularly but only buys when there’s a discount. AI can pick up on that pattern and automatically serve up a limited-time offer tailored just for them. Or maybe a customer adds something to their cart but doesn’t check out. AI can trigger a small price nudge or a personalized email to bring them back.

You can also use AI to A/B test different pricing strategies, like charm pricing ($9.99 versus $10) or bundle deals, to see what actually works with your audience. Over time, these tools help you fine-tune your pricing in a way that feels intuitive and relevant to each customer.

Use mobile commerce pricing psychology 

Mobile shopping comes with its own quirks, like small screens, short attention spans, and a need for speed. That means your pricing strategy needs to be extra clear and compelling on mobile, especially since 49% of consumers use their smartphones to compare the prices of products. 

Psychological pricing principles like charm pricing (ending in .99), urgency (e.g., “Only 2 left!”), and anchoring (showing the original price next to the discounted one) still work well, but they need to be quick to spot and easy to digest on mobile devices.

Use bold, mobile-friendly design to highlight price drops, show savings clearly, and place call-to-action buttons near pricing info. You can also tap into behavioral nudges like limited-time mobile-only offers or push notifications that use fear of missing out, or FOMO (“Your favorite item is back in stock—grab it before it’s gone!”).

Ethical considerations in psychological pricing

On one hand, these pricing tricks can help businesses make more money, which isn’t necessarily bad. They need to stay afloat and pay their workers, after all. Plus, if customers feel like they’re getting a good deal, everyone wins, right?

But on the flip side, some people argue that it’s not cool to take advantage of how our brains work in the name of sales. Here are some questions to ask yourself before you implement any of these psychological triggers. 

Are you being transparent?

One big ethical concern is whether businesses are being honest with their customers. If you’re using psychological pricing, should you tell people about it? Some say yes, that being upfront about your pricing strategies is the right thing to do. Others argue that it defeats the purpose if you explain the trick. 

Are you testing customer trust?

At the end of the day, it all comes down to trust. If customers feel like you’re always trying to pull a fast one on them, they might not want to buy from you anymore. But if they feel like you’re giving them a fair shake, they’re more likely to keep coming back.

Are you considering vulnerable customers?

Another ethical issue is how psychological pricing affects different groups of people. Some folks might be more easily swayed by these psychological pricing techniques than others. Think about elderly people, kids, or people who struggle with math. Is it fair to use pricing tricks that might confuse or mislead these groups? Consider the ethical ramifications of your pricing strategy on your particular target audience. 

What are your long-term goals?

When thinking about the ethics of psychological pricing, it’s important to consider the long-term effects. Sure, you might make a quick buck today, but what about tomorrow? If customers feel tricked or taken advantage of, they might not come back. And they might tell their friends to stay away too.

What kind of reputation do you want to build?

In the end, businesses need to think about what kind of reputation they want to build. Do they want to be known as the company that always has the best deals? Or the one that’s always trying to squeeze every last penny out of its customers? The way they approach psychological pricing can play a big role in shaping that reputation.

How are you using AI-driven pricing? 

Deloitte predicts that more brands than ever will use AI-powered pricing solutions in 2025. But while AI-driven pricing optimization can personalize offers and increase revenue, it needs to be handled thoughtfully. Are you using AI to serve fair, relevant pricing based on behavior, or are you using it to squeeze every last penny out of a customer? There’s a line between helpful and exploitative. Ethical use of AI means prioritizing transparency, avoiding excessive price surges, and making sure the tech supports your customers.

How are you handling data privacy? 

Personalized pricing often relies on user data, but that doesn’t mean you should overstep. Make sure customers know what data you’re collecting and how it’s being used. Be clear about cookies, offer opt-outs where possible, and avoid using sensitive information (like location or purchase history) in ways that could feel invasive.

Testing and iterating psychological pricing strategies

The amount that customers are willing to pay for different products is never set in stone. And your prices can’t be either. That’s why it’s important to keep trying out different prices over time. You might be surprised by what you discover.

For example, you might find that the time of year has a big impact on your store. Maybe people are more willing to spend money in the summer when they’re in a good mood but tighten their belts in the fall when they’re thinking about back-to-school expenses.

The key is to test, tweak, and iterate your strategies until you find the right fit.

Here are some practical ways to figure out the best prices for your products.

Run pricing tests

Try out different prices for the same product and see how it affects your sales. Just be careful not to confuse or upset your customers by changing prices too often. Tools like Google Optimize 360 (for enterprise users) and ABConvert let you A/B test not just pricing, but how prices are displayed—like showing discounts, strikethroughs, or bundles. These tools make it easy to compare conversion rates and identify which pricing approach performs best.

Use advanced analytics

Platforms like Hotjar, Heap, and Mixpanel now integrate pricing analytics to help you track how users interact with your pricing pages. You can spot friction points, see where customers drop off, and correlate behavior with specific price changes.

Get customer feedback

Don’t be afraid to ask your customers what they think about your prices. You could send out surveys or even chat with them directly. People are often happy to share their opinions, especially if they feel heard.

Look at abandoned cart data

If lots of people are adding items to their cart but not buying, it might mean your prices are too high. Check out which products are often left behind and consider adjusting their prices to reduce cart abandonment rates. 

Examine your overall numbers

Keep a close eye on your sales figures. If you notice a sudden drop or increase in sales after a price change, that’s valuable information about your different pricing strategies.

Watch your competitors

Keep an eye on what similar businesses are charging. You don’t have to match their prices, but it’s good to know where you stand within the context of your market.

Consider bundle deals

Sometimes, offering a discount when people buy multiple items can encourage bigger purchases.

Try different pricing models

Maybe a subscription model would work better than one-time purchases for your business. Or perhaps offering a “pay what you want” option for certain products could produce results.

Use pricing software

Dynamic pricing tools like Prisync and Intelligems make it easier than ever to automatically adjust prices based on demand, competitor activity, or customer behavior.