Wapsi Square Forum

Uh.

Yeah. So I'm looking at the ad up at the top of the screen (currently have my blocker turned off to check for ads for new webcomics):

Advertisement wrote:Ads by Project Wonderful! Your ad here, right now: $0

Won't this cause Paul a bit of a major problem? I imagine advertisements are a pretty big part of his income... And the ad at the top of the forum probably helps Paul pay Bookworm (right? Or is Bookworm some kind of volunteer? I don't know how modding or administrating an Internet forum works...)

Just thought I should draw attention to it, in case it is a problem that needs fixing...

Rounding, Glytchy... current bid on a forum ad is 0.01. Ads on the comic page go for 0.98-5.60.

Well, if it was $0.01, it would display that, don't you think? Right now, it's displaying $0.10, so it is capable of displaying two decimal places.

GlytchMeister wrote:Well, if it was $0.01, it would display that, don't you think? Right now, it's displaying $0.10, so it is capable of displaying two decimal places.

I think the ad in question is actually paying out less than a cent, but more than zero, so it is hitting a rounding error, probably because it's paying out $0.0049 a click or something like that.

Huh.

Like how gas prices are always $X.XX9?

That's always confused me. Why do we use pieces of money smaller than pennies? To me, it seems like it just adds needless complications...

Hell, pennies are going out of style anyway. A lot of people are wondering why we still have them.

GlytchMeister wrote:Huh.

Like how gas prices are always $X.XX9?

That's always confused me. Why do we use pieces of money smaller than pennies? To me, it seems like it just adds needless complications...

Hell, pennies are going out of style anyway. A lot of people are wondering why we still have them.

It's a very effective piece of marketing psychology, with a long history.

Consider: how do people perceive a price like "$49.95" or "$49.99"?

Usually, it's not perceived as "almost $50". Rather, as "$40 plus change" or "$49 plus change".

If you put up two competing items for sale, otherwise identical, and price one at $50 and the other at $49.99, and look at which one sells... the $49.99 one will tend to sell a lot better.

People seem to use a heuristic in which they evaluate a price by the overall magnitude (number of digits before decimal point) and the first digit. A more detailed comparison occurs only if the first two considerations match.

So, $49.99 wins out over $50 even though the price difference is negligible.

As to gas prices... the tradition of using tenths of a cent probably dates back to the era when gas cost a lot less than a dollar a gallon. A tenth of a cent was a few tenths of a percent of additional profit, and in a highly competitive market that could make a difference. The tradition continues, probably because nobody has seen fit to change it (and give up any of their margins).

Even today... charging $2.59 a gallon rather than $2.599 would reduce retailer margins by around a penny on every 10-gallon sale. A busy medium-sized gas station (say, 10 pump stations) might have 5 sales per minute, or 300 per hour, or $3/hour. That's a not-inconsiderable fraction of a minimum-wage salary for an attendant/cashier.

I just assumed it was a "Free to try!" introductory price...

In 1933, Congress replaced a temporary one-cent/gallon tax with a permanent .015/gallon levy. Many retailers decided that if they needed to calculate tenths of cents, let's go for the .009 to make .249 "less" than a quarter. But, as coinage rounds to cents, they could still ding ya for the quarter.

Dave wrote:

GlytchMeister wrote:Huh.

Like how gas prices are always $X.XX9?

That's always confused me. Why do we use pieces of money smaller than pennies? To me, it seems like it just adds needless complications...

Hell, pennies are going out of style anyway. A lot of people are wondering why we still have them.

It's a very effective piece of marketing psychology, with a long history.

Consider: how do people perceive a price like "$49.95" or "$49.99"?

Usually, it's not perceived as "almost $50". Rather, as "$40 plus change" or "$49 plus change".

If you put up two competing items for sale, otherwise identical, and price one at $50 and the other at $49.99, and look at which one sells... the $49.99 one will tend to sell a lot better.

People seem to use a heuristic in which they evaluate a price by the overall magnitude (number of digits before decimal point) and the first digit. A more detailed comparison occurs only if the first two considerations match.

So, $49.99 wins out over $50 even though the price difference is negligible.

As to gas prices... the tradition of using tenths of a cent probably dates back to the era when gas cost a lot less than a dollar a gallon. A tenth of a cent was a few tenths of a percent of additional profit, and in a highly competitive market that could make a difference. The tradition continues, probably because nobody has seen fit to change it (and give up any of their margins).

Even today... charging $2.59 a gallon rather than $2.599 would reduce retailer margins by around a penny on every 10-gallon sale. A busy medium-sized gas station (say, 10 pump stations) might have 5 sales per minute, or 300 per hour, or $3/hour. That's a not-inconsiderable fraction of a minimum-wage salary for an attendant/cashier.

I think part of the historical reason for odd pricing was to make it harder for underpaid clerks to pocket the cash without opening the cash register to make change.

With gas pricing, they're not tacking on $0.009--they're shaving $0.001 to make you think you're paying a penny less. A hundred years ago, a penny was worth something.

Awhile ago I asked my dad whether he had ever seen gas prices that ended in 0.008 or any other value than 0.009. Nope.

GlytchMeister wrote:Hell, pennies are going out of style anyway. A lot of people are wondering why we still have them.

In Canada, the penny was eliminated from production in 2012, and withdrawal from public use began in 2013. Nowadays, prices still add up to odd numbers, but when paying cash, they are rounded up or down to the nearest nickel (5c piece). Only when paying by direct debit or by credit card, do you pay the actual, non-rounded price.

Honestly, we should be moving to a more virtual form of cash anyway. It's harder to steal,easier to handle, significantly reduced logistical issues, and it's not like money isn't an arbitrary concept based on faith on the government already.

Really, it'll be a dead simple exchange. Turn your money into the bank. You have a debit card. Done. Personally, I haven't paid cash in probably a decade or more, and I've written exactly two checks in my entire life.

ShneekeyTheLost wrote:Honestly, we should be moving to a more virtual form of cash anyway. It's harder to steal,easier to handle, significantly reduced logistical issues, and it's not like money isn't an arbitrary concept based on faith on the government already.

Really, it'll be a dead simple exchange. Turn your money into the bank. You have a debit card. Done. Personally, I haven't paid cash in probably a decade or more, and I've written exactly two checks in my entire life.

They already have the technology to implant a chip in the right hand to deal with your account- in the absence of a right hand, it goes under the skin of your forehead. A scanner reads it- GPS can track it.

Not THIS boy.

I rather like having cash. It's hard to track. Plus, it's much more easily transferable than digital funds.

GlytchMeister wrote:I rather like having cash. It's hard to track. Plus, it's much more easily transferable than digital funds.

Reloadable debit cards (not associated with any particular account) are just as untraceable, just as easy to pass around, and far less conspicuous for higher end transactions. Heck, there's a huge black market in gift cards, particularly ones like Wal-Mart where you can use it to buy staples with or TJ Max to get cheap clothing with.

One of the old scams that happens all too often is when a shoplifter goes to another store in the chain, returns what he stole for store credit (because he 'forgot his receipt') then goes out and sells the gift card at fifty cents on the dollar. Sure, your margin is less, but you're using the store you just stole from as your own fence. Consider the mark-down to be the fence's cut, and you're actually probably ahead of the deal.

Not the reload able ones. At least not around here. You need an id to buy a green dot card.

Then on-reloadable ones... Maybe. But even so, they leave a trace and a time stamp. Cross-reference that timestamp with security cameras, and boom. That card is now associated with you.

Cash is still harder to trace.

The problem with digitized currency is private corporations control and charge for processing each transaction. We all end up paying just to be able to pay.

shadowinthelight wrote:The problem with digitized currency is private corporations control and charge for processing each transaction. We all end up paying just to be able to pay.

Oh, yeah, there's that, too. Every non-reload able card costs... What, something like three bucks? But that's the only charge.

It's nice for ordering online when you don't want to use your debit card.

GlytchMeister wrote:Oh, yeah, there's that, too. Every non-reload able card costs... What, something like three bucks? But that's the only charge.

On your side of the transaction. High-volume merchants pay about 1% plus equipment fees plus monthly services charges to process digital transactions. I ran a touch more than $20K in card revenue last year at 2.75%-3.5%, with no equipment or monthly fees.

AmriloJim wrote:

GlytchMeister wrote:Oh, yeah, there's that, too. Every non-reload able card costs... What, something like three bucks? But that's the only charge.

On your side of the transaction. High-volume merchants pay about 1% plus equipment fees plus monthly services charges to process digital transactions. I ran a touch more than $20K in card revenue last year at 2.75%-3.5%, with no equipment or monthly fees.

Yup. Square, PayPal, etc. all end up hitting the small-business merchant for somewhere in the 2.5-3.5% range for commercial transactions.

In the end, you can expect that this will be reflected in the merchant's prices.

That's why merchants often offer a cash discount.

Here in California, there was for years a law which said that stores can't add a surcharge to the price to cover credit-card processing costs... they had to be willing to sell a product at their advertised price even if the buyer used a credit card, and "eat" the billing cost. Merchants could, however, offer a "cash discount" (e.g. "The price is $100, but if you pay cash I'll knock off 2%"). There was an exception for gasoline sales, which list separate "cash" and "credit" prices (except for Arco, which doesn't take credit cards at all).

A year or so ago, some merchants took the State to court, arguing that this restriction amounted to an unConstitutional restriction on their freedom of speech, because the State was dictating how they could legally talk about a price difference between "pay cash" and "pay via credit" even though the price difference was the same either way. The state disagreed, saying it wasn't about "speech" but about "deceptive advertising". The court took the merchants' side, and declared the state law to be unConstitutional (this decision is being appealed).

So, merchants here can now say "Add 2.5% to the price if you're paying by credit card" and be legal... as long as they do this clearly, in advance of the sale. (Adding the surcharge without mentioning it, or without saying anything until after the deal was struck, would be deceptive and is still illegal).

The contractor I'm dealing with for a furnace replacement job is doing it the "new way": the price estimate is for "cash or check", and "Please add 2.5% to cover processing fees if paying via credit card".

This actually seems pretty fair to me, since most credit cards these days offer a percentage of "cash back", which of course is coming out of what the merchant gets paid.

Dave wrote:Here in California, there was for years a law which said that stores can't add a surcharge to the price to cover credit-card processing costs...

Federal law allows merchants to impose a $10 minimum transaction on CREDIT transactions and forbids any surcharge on a debit card.