Like the name suggests psychological pricing is about using psychology to sell. In a nutshell, it's about tweaking the product price based on what's known to work. Setting the price lower than a whole number is one of the tactics that's used. It's an effective way to set a price in the short term
A recent report from Stripe revealed that the simple act of pricing something with .00 or .99 can have a considerable impact on the purchasing decision of your customers.
When it comes to buying products, new customers make more overall purchases that end in a 9 for items that cost under $10. However, Stripe says it also extends to items costing $700, $800, or $900.
Evidence of this practice has resulted in higher purchases by consumers for items ranging from $.99 to hundreds of dollars.
To learn more, read: Psychological Pricing Online Helps Merchants Sell More, Study Finds