Oil Companies Cheat Selves Out of $170 Million Annually
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James Joyner | Wednesday, May 9, 2007 |
The oil companies could make an extra $170 million annually if the rounded the trailing 9/10 cent on gas prices up to the next cent, the folks at WiseGeek calculate, at an average cost to the consumer of 45 cents. It’s unclear why they don’t do this since, as the piece points out, nobody pays attention to that 9/10 anyway.
This, naturally, brings to mind “Superman 3,” in which Gus Gorman, played by the late comedian Richard Pryor, manipulates computer software to steal the fraction of a cent out of every employee’s salary that was earned but not paid into his own bank account.
Come to think of it, maybe the negative critical reaction to that movie has put the oil companies off the scheme.
About the Author: James Joyner is the publisher of Outside the Beltway and the managing editor of the Atlantic Council. He's a former Army officer, Desert Storm vet, and college professor with a PhD in political science from The University of Alabama. He lives just outside the Beltway in Alexandria, Virginia with his wife and infant daughter.
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I think you meant "million"
That's what I had in the lede, but I mistyped it in the headline. I'm used to economics numbers being expressed in billions....
It'd probably cost more than that to reprogram the price signs.
It'd probably cost more than that to reprogram the price signs.
Could be -- although that's just a one time expense.
We see that behavior all the time...how many things are priced $19.99? The reason for the 9/10s of a cent was to convince people that the price was a penny cheaper.
It is basic marketing principal. As stated, most don’t’ pay attention to the .9. That is why they tack that on. That is why most things are price along the line of $19.99, $28.99, $14,980.98, etc.
The reason is people see the price of $14,980 and their minds believe it is closer to $14,000 instead of the actual $15,000
It isn't so much that $2.999 isn't closer to $2.00, it's just that $2.999 is less than $3.00, thereby avoiding the mental barrier and attendant alarmist headlines attached to the round dollar price.
Come to think of it, if you are correct that consumers don't pay attention to the $.009, you might just as easily have titled the post "Oil Companies Cheat Consumers Out of $1.53 Billion."
Not Superman III by way of Office Space? What the hell is wrong with you?
"It's pretty brilliant . . . They did it in Superman III. Underrated movie, actually." - Michael Bolton, Office Space
Actually, Donny's Discount Gas uses 8.10. See also, The Simpsons
Someone appreciates Superman III. Richard Pryor had no business being in a superhero movie, but it was fun. Although the supercomputer turning the woman into a robot creeped me out seeing it as a kid.
Truly the worst Superman movie was IV. No villain should have fingernails that long.
Think how much more they stand to gain if pennies are eliminated (as I frequently hear suggested).
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