Interesting Stuff
And Nine Tenths Please
July 21, 2006 
We all know the gas companies are scamming us. The GUARDIAN has done some investigating and found the practice posting gas prices with an additional “9/10th is meant to be deceiving. And it works.
If one store (remember gas stations?) is charging $2.89 and 9/10th they will outsell the place across the street with gas priced at $2.90 and the fill up there will cost you about 2 cents more for a tank!
We have noticed some of the new digital pumps show prices at $2.899 which looks ominous. You never see gas at $2.89 and 3/16ths or 5/32nds and you will play hell trying to get change if you buy EXACTLY a gallon.
We searched the internet and found several theories for the 9/10th, but the bottom line is they tack the extra 9/10th on the price simply because they can. When gas was 17 cents it may have meant something.
The GUARDIAN has the solution to this situation: The IDAHO LEGISLATURE! The lawmakers who spend untold hours debating gay marriage, abortion, stem cell research, birth control, on again off again sales tax, and elk license plates can certainly make it a crime to post prices in fractions less than one cent.
Maybe someone should start a petition drive as well.
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Comments & Discussion
Comments are closed for this post.
Jul 21, 2006, 10:02 am
Guardian, since I rarely pull into a gas station (after all, I’m “bikeboy”), I haven’t paid much attention to this problem. But you’re right! This is JUST the kind of thing the Idaho Legislature could wrap their collective arms around! Might a special session be in order?
On the other hand… you frequently hear the call to get rid of pennies altogether. (They cost almost a penny to produce.) I think that is WRONG! Instead, the gummint should start minting 1/10-cent coins! That would be a better solution than meddling in the fuel merchant’s business. The coins wouldn’t have to be fancy… in fact, they should be made out of recycled plastic. And I’d love to buy exactly one gallon of gas, and count out two bucks, a few “classic” coins, plus nine of my new plastic 1/10-cent coins.
EDITOR NOTE–A greenie solution that will stimulate the economy because they will have to make new cash drawers to handle the TENTHERS. A new spin on “plastic or paper” as well. Brilliant GUARDIAN readers always have the answers.
Jul 21, 2006, 1:49 pm
How about just dumping the fractions and going metric. Almost every measurement is metric anyway.
The kids don’t run the 100yd dash anymore. Our kids would catch up with the rest of the world in math if they didn’t have to divide fractions. Our monetary system is metric. Go ahead, call me a commie.
How about the new “regular” gas at some stations.
Regular used to be 87 octane. If you look you will see that at some stations it is 85 octane and the 87 octane is “regular plus”. So one station can advertise regular gas a penny cheaper but it’s not the same stuff. I call that bait and switch. Lets see a politician wrap his mits around that one.
Jul 21, 2006, 4:15 pm
Gas retailers use zones to decide how to price. It will often cause fairly large price differentials depending on the zone. Rich/poor neighborhood, good/bad location. It is based on how much the market will bare in a certain area. Still lots of people with a lead foot…..maybe cars need an instant cost meter….like a cabie meter….that thing makes me want to walk most of the way.
Did you know that some gasoline chains are owned by governments (City Service) that hate the US. Like The commie in Venezuela. Is there any doubt that the US is held in low regard throughout the mid-east??? Idea!!! If food is cheap for them and oil is costly for us, I must ask what fool is setting the price of exported food? Food doesn’t grow well in sand. Make oil cheap or we make food expensive….very simple. BUT NO!!! We give food away….we are fools. Or is it possible that lots of mid-east money is having a strong influence on the people that make our price policy??? Hmmmm.
Jul 21, 2006, 4:43 pm
The logical solution is to pay that bogus 1/10 cent with manufacture coupons currently in circulation with a 1/10 cent redemption value. We’d be recycling something already out there and the registers wouldn’t have to be redesigned. What better way to get rid of those coupons before they expire!
Jul 21, 2006, 5:40 pm
I don’t see a problem with the nine tenths pricing. Everybody knows how it works. All stations do it. They always have.
What REALLY DOES IRK ME is the DECEPTIVE way Albertsons stores prices some of their items. Their price tag will state some absurdly high “regular price”, then the real price, then some fantasy “savings”.
When you go to check out, the display on the cash register, whether it’s operated by a cashier or automated, will display the absurd “regular price”, and below that, the absurd fantasy “savings”.
But it will NOT display the ACTUAL PRICE you are being charged for the item. You have to do the math in your head, and it’s not easy to keep up with a cashier. Especially if you’re buying a lot of items. I seldom buy more than a few items, and have a good idea what my total will be, and there have been -many- times when the cash register displays a total that’s way, way different. That’s when I notice that it’s rung up a different price, or not computed the discount.
Albertsons has a policy of letting you have an item free if it rings up at a higher price than marked, but it’s a pain to verify it. But I’ve gotten a lot of free food there by being alert.
I just wonder how much they rip off from people who have too many items to estimate, or can’t keep up with the display, or are too timid to question a price.
I’d gladly give up all that free cheese for some simple HONESTY. How much does the damn thing cost? Not 20 of them, ONE of them. Not the “regular” price, not the “savings”, just tell me how much the damn thing COSTS.
There’s no doubt in my mind their pricing system is intentionally designed to overcharge customers.
Jul 21, 2006, 10:13 pm
Slow day in Dave-land. I think ol’ FRAZ is about 1/10 of a penny short of full price.
Must be the heat.
Jul 23, 2006, 8:17 pm
The oil company scam that drives me crazy is when the pump ticks off $.01 before any gas starts flowing.
Can you imagine how much money the oil companies skim with this tactic? I have heard they have been prosecuted in some areas over this but I notice it still happening around here at certain stations.
Jul 25, 2006, 11:41 am
Jeeze. Complain that gas stations are charging 9/10 of a cent. Complain that Albertsons FORCES you to use math? These are simple mathmatics. Round up the 9/10. I personally feel it is a shame that SO many people have problems with simple math.
Jul 27, 2006, 12:17 pm
I learned about that in an oil & gas law class last year: The extra 9/10 results in about $4 billion more in profits for the oil companies per year. That’s why they do it.
Jul 27, 2006, 4:11 pm
Kevin, the point is not the difficulty of the math, but simple HONESTY. The gas pump doesn’t bother me, because I buy gas in even dollar amounts. The math may be elementary, but it’s not easy to do in your head when the checkout display is displaying irrelevant numbers that you have to reduce to something meaningful, while keeping a running total in your head. It’s made worse by the fact that the display only shows a few lines at a time. WHY do they waste those lines telling you the “regular” price, and the “savings”? WHY don’t they simply show you the ACTUAL price?
Because they’re intent on ripping you off!
Maybe you don’t mind being overcharged by 2x or even more than what you ought to pay, but I don’t have money to waste on ripoffs. I find their evasiveness unnecessary and insulting.
Jul 30, 2006, 12:20 pm
Something other than paying the listed price of a product or service bothers me. When retailers round-up on every sub-fraction of a penny (like when it’s below .5-cent), who notices?. But, then again what’s a penny?
Imagine a retailer making an average 1000 sells a day, each garnering an extra penny. But what’s 10 bucks a day?
Imagine that retailer then remitting their quarterly taxes – based upon actual sales. The $10/day isn’t declared, which ONLY amounts to just over $900 a fiscal quarter. But what’s $3,600 a year in undeclared (and illegally gained) income?
Now imagine 1000 retailers using this illegal practice in the Boise Valley (a conservative estimate). But, what’s a 1/3 of a million dollars picked from the people’s pockets?
I’m not a skinflint and I always tip by waitron more than 15% – but paying anything extra for a product or service should be MY choice, right?
Jan 4, 2007, 12:00 pm
Just for kicks, I have tracked every gallon of gas I have ever purchased. For my last two vehicles I have purchased 5878.471 gallons of gas, and have determined that the gas station rounding has actually saved me 5.22 cents rather than increasing the stations’ profits. Admittedly, spending $10,698 to save 5.22 cents is hardly worth the effort. But to suggest that the oil companies are skimming billions through this scheme is probably a stretch.
Sep 30, 2008, 2:14 pm
just do what alot of people do,pump in a couple pennies more! what’re they gonna do,arrest you?
Nov 5, 2008, 3:08 pm
OK, let’s clear something up here. The amount a gas station charges you, including the $.009 extra is not, in fact, extra, It’s exactly zero more or less than they are reporting to charge you. Is it dishonest? No. If anything, it’s more honest than necessary. Is it deceiving? In some cases, yes. This is not a math problem. It’s a marketing scheme. A LEGAL marketing scheme. How’s that, you ask? Simple. While they are telling you that they are charging you the price you see, almost no one ever says, Hey! Look! Regular is $X.XX AND NINE TENTHS OVER THERE! In reality, you’re getting charged all but that whole extra cents everywhere you go. But to the consumer’s eye, it’s a penny less because no one thinks in thousandths of a dollar.
No, for reference, if you have a 25 gallon tank, you’ve paid $.25 more than you pictured paying (if in fact you did picture a dollar amount). But you didn’t pay any more or less than the displayed price. Since all gas stations do it (so that they can compete evenly with the gas station on the OTHER corner) there’s no better or worse deal than the cents represented in the tenths and hundreths of a dollar spaces. But again, to the consumer’s eye, the nine thenths was not a factor.
To say that there is extra revenue from the nine tenths is not accurate. Nor is it accurate to say that the extra nine tenths was tax free. In the same way that after pumping ten gallons of gas, the pump doesn’t read $xx.xx and 90/10ths. It simply rounds it up and continues to add it together right to the end.
So this whole thing (as deceptive as it seems) is nothing more than a marketing ploy that placates the public into feeling like they are paying one cent less per gallon and it has spiraled into a point of global acceptance.
In fact, dropping the extra fraction and rounding up to the nearest cent could eventually result in a one cent drop in the price of a gallon of gas as that one cent would cause customers to look for that gas station that was (now) one cent lower in price. And since (as of late) the price of a gallon of gas is hitting record lows, that one cent would be hard to even count.
There, I said it.