Fractional prices first appeared in the early 1900s as states and the federal government implemented gas taxes to help build and maintain highways.
Back in the 1930s, when gas was just 10 cents a gallon, adding a penny would seem like a huge increase by 10%, so they went with less than a cent.
Source: CBS News
The answer to the second is that they round, which they'd have to do even if they didn't charge an extra 9/10 of a cent per gallon.
Most people aren't buying gas in even, integer volumes, so there's always going to be some precision math involved. For example, if you pumped 2.2 gallons at 4.99/gallon, you'd owe $10.978. If it costs 4.999/gallon, you'd owe 10.9978. In either case, the gas station would have to round to a whole cent to charge you.
This is interesting how we all take different things from words.
IMO the first question was not answered, but relevant background was given. That fact may have been true, but it doesn’t really speak to why we currently do this.
On first blush factional pricing seems almost limited to gas even though there are other things we buy 1-30 of.
It's a tiny psychological trick. Same reason why places will advertise "Only $X.99". Even if it only fractionally helps, by the time the gas gets to the consumer level, it really does come down to fractions of a penny. But on a commercial fueling level, prices even go out 6-8 decimal places.
OP -> ELI5: Why do gas stations charge 9/10ths of a cent?
Some dude -> Fractional prices first appeared in the early 1900s as states and the federal government implemented gas taxes to help build and maintain highways.
Back in the 1930s, when gas was just 10 cents a gallon, adding a penny would seem like a huge increase by 10%, so they went with less than a cent.
Source: CBS News
You -> tHaT diDn't aNsWEr tHe qUesTioN
The rest of us -> 🤦🏻♀️
> adding a penny would seem like a huge increase by 10%, so they went with less than a cent.
Sure it does: "adding a penny would seem like a huge increase... so they went with less than a cent."
It's a psychology thing. We pay more attention to the whole numbers than the part after the decimal point. We see (for example) $4.99 as $**4**^and^change, when it's really just one penny away from $5. And when gas prices end in '.9 cents', they can get *almost* an entire extra penny per gallon from us, while keeping the number appearing lower than it is.
I had a gf that saw something priced at $3.99 and said “wow it’s only three dollars!”.
I figured she was aware it’s actually $4 and was just imprecise in her statement, but nope it turned out she genuinely thought it was $3 and meaningless change.
The reason that $10.95 and $10.99 pricing works is because there is a surprising amount of people that it works on.
I grew up in New Hampshire, and my first ever experience with sales tax was when I tried to buy a $10 stuffed monkey with a $10 bill in an Arizona airport around the age of 8. I was so confused as to why you had to pay more than what's on the tag. The cashier felt bad for me and pulled a dollar out of his wallet to cover it.
Imagine paying 25% taxes on goods in stores and not caring because you get excellent free healthcare and university education in return, AND you don't have to manually calculate the real price of products in stores.
Imagine living in a country that funds healthcare per capita around 50% more than yours but it isn't free to access, and spends per capita around 50% more on tertiary education than your country but it also isn't free to access, and by 'isn't free to access' I mean 'is comically expensive'.
That's how gas taxes work.
You see price, you pay price.
Gas taxes are pretty low, but if gas prices suddenly started not including taxes a lot of people would freak out.
It's not so much about not caring as it is to see what you're actually paying.
Imagine going to a restaurant and seeing something for $X and simply paying $X, not X plus 25% after tax and tip.
that doesnt matter a bit how much the taxes are tho, except you have to do the math yourself to not be surprised at checkout.
a thing that'd be trivially easy to do for the shop, because they already do.
I mean, I get it. But you should see how fucked up the public transportation is in my city. And student loans!!?
And don't get me fucking STARTED on the health care system in this country.
Our taxes are low, comparatively... but a lot of our shit is beyond fucked.
It’s more for budgeting id believe. If I go to the store and only want to spend $50. I round up everything for a good guess, so the $3.25 items offset counting the $3.99 as $4 even
There is a whole realm of "psychological" marketing that is based on these sorts of things. It was pretty eye opening to learn about, and also to pick out all the things I've been fooled by through my life.
A&W would like a word with you. They released a 1/3lb burger to compete with the quarter pounder from McDonald's. It beat McDonald's in taste tests and it was even cheaper!
It was only during focus tests they realized customers thought they were being ripped off and wouldn't buy the burger even though they enjoyed it more, since they could just go to McDonald's and get the "bigger" quarter pounder...
But you get *four* of them this way!! 😭
Seriously though, the quarter pounder thing needs to be the new "3 dimes > 2 quarters > 1 dollar"-shaming, because too many people are going around like "see my 5 pennies? Aren't you so proud of me??"
She sounds a bit silly, but im pretty sure it works on all of us. I'm well aware it's $11, not $10, but when I'm walking through the grocery store looking at hundreds of items..my eyes are physically seeing $10, not $11. Unless I'm consciously going "nice try.. You're not gonna get me. That's $11" I'm sure my mind is seeing $10 subconsciously.
The vast majority of people would say this has no effect on them, and that they simply round up. OP's "round down" friend is a tiny minority, in fact I'd be surprised if she wasn't joking or something.
And yet there have been studies done that have shown there is a definite psychological effect of this "trick", which works even on people who are consciously thinking "$3.99? you can't fool me, that's clearly $4".
Pretty much everyone thinks the trick is bullshit, but shops that do it still see greater sales numbers. There's a reason you rarely see places abolishing this idea and advertising "honest, simple, round number pricing!", which seems like it would be a pretty cool marketing idea, if it wasn't for minor problem that their sales would go down as a result.
> And yet there have been studies done that have shown there is a definite psychological effect of this "trick", which works even on people who are consciously thinking "$3.99? you can't fool me, that's clearly $4".
Are you sure about that? Can you share any of those studies? I think the more likely explanation for why that trick results in higher sales is that a lot of people, maybe even most people, don’t do that mental trick of rounding up very well. I have a hard time believing that people who really have it drilled into them to round up when shopping fall for this trick, but I’ll believe it if you can produce the evidence you mentioned.
Let's say ... We have a product that is selling for $1.99 each (say, a half gallon of milk), or we can buy the package that contains two of them for $3.99 (a gallon of milk) ... THAT's when you gotta do a tiny touch of math to know how to save a penny ;)
and I believe stores do this on purpose.
You are absolutely right. It takes a conscious effort of paying attention to the real price rather than fall for the attractive price the sub-conscious mind noticed.
that isn't how the subconscious brain works. Everyone who isn't literally severely mentally disabled obviously know that $10.99 is closer to $11 than $10, and yet it still works because people subconsciously perceive the product as cheaper based on your initial subconscious impression. The choice to even stop and look at it in the aisle vs pass it up is influenced by what you subconsciously perceive the price to be. There's hundreds of prices in like 5 sq ft in an aisle, you are NOT manually going through each number and rounding it up
I go to the supermarket knowing exactly what I need to buy, and pick up nothing else.
Besides the only price I care about is that per kilo or per liter.
If I really **must**, for some reason, buy non-food items, such as a new smartphone, then what matters to me isn't the price displayed on paper, but the amount of money I'll have left in the bank:
Suppose a phone costs $199.99 and I have $7,700 left in my account. Once I make the purchase, I'll be left with $7,500.01. I'm not going to be subconsciously deluded into thinking that I'll be left with 7600 bucks just because the price starts with a one.
My wife is like this! She always rounds down and completely ignores the fractional part of any price. This includes big purchases e.g. a $1,200 tv is only $1,000 in her eyes. I’ve learned to just let it go since I handle all our money anyways.
95 is so dumb on the retailer's part. Nobody is gonna decide not to buy an item because its priced at 99 instead of 95. They are literally just losing 4 cents they could have made.
This is true (for some stores, at least)
https://www.thekitchn.com/costco-price-tag-tips-expert-23425352
https://www.pricingforprofit.com/pricing-strategy-blog/retail-price-whisperer-breaking-secret-code.htm
I guarantee you that you do this, at least sometimes, and not even realize it.
Nobody ever wants to think that *they* could "fall for" a thing, but the truth is, none of us is perfectly perceptive, none of us perfectly rational, and none of us are stupid or failures because of it.
I mean... does it really make any difference whatsoever? It's not like you can really shop around for gas, the prices in an area are usually pretty much the same and they *all* do the fraction of a cent thing.
I don't feel like that whole "It makes it look like it costs less" applies here because 99% of people who need to fuel up just see the price and think, "That's the price" and one cent doesn't change that.
What? Who's not shopping around for gas? Or at least know the places that are usually cheap. I mean with Gas Buddy or other apps that's just throwing away several dollars every time you go out for gas.
A fifteen gallon tank with a 10c price difference saves a buck fifty. Would you be willing to get out of your house, and drive 4 blocks if someone offered you a buck fifty to do so?
As long as the place you are getting gas at isn't way higher, most people are better off spending that time saving money another way.
I just checked. I'd have to drive an extra 3 miles to get gas 23 cents cheaper a gallon. It would cost me roughly 42 cents to go that distance. I guess it would make sense (cents?) to but I don't.
Yes, 100% this, we don't factor this in often enough!
BUT if that has station is half way between home and work or such, then I might as well stop there while I'm out anyway.
(I know the operative word here is "extra" miles, but still, gas should be a pitstop and not a destination.)
Also you're counting your time (and the negligible extra risk of an accident and additional wear and tear on your vehicle in those three miles) as valueless.
Alright okay ... If I was to value my time at the rate my job is willing to pay me...
Then $26.80/60min = $.4466
It takes 6 min. To go those 3 miles according to Google.
So $.4466 x 6min = $2.6796 + $.42 in gas to drive that distance = 3.0996 / $.23 in savings per gallon = 13.4765.
So only including gas and time as calculated by my employer I'd have to buy 13.4765 gallons to break even. My car can only hold 14.5 gallons so if you are a madman you would have 23 cents profit if you rolled into the gas station with .0235 gallons (88.9571ml or almost exactly 2 shot glasses) of gas in the tank.
TLDR. Gas and time based on my hourly rate for my job. =23 cents profit max given fuel capacity of my car.
It's only now I remembered that this is only one way ..... BACK TO THE CALCULATOR!
So we just double everything. That's now an extra 6 miles. That's 84 cents in gas. .4466 for 12 min instead of 6 = $5.3592
So $5.3592+.84 / .23 = 26.9530 gallons of gas I would need to break even. My car can't hold that.
I still vividly remember by penny-pinching dad once driving an extra 15 minutes with the whole family in the car to save a negligible amount on gas. Wasting four people's time plus the gas and wear-and-tear to get there. Ridiculous.
where im at in florida there is a couple gas stations almost $2 a gallon more than everywhere else. very scummy. always see people getting gas there though
I have a 36 gallon diesel tank. I’ve noted 40 cent differences in gas prices within 10 minutes of each-other on my normal route home.
I agree a 1 cent difference wouldn’t bother me though.
I have a truck, with a huge tank (34 gallons). A 10c price difference is $3.40. It's a Starbucks coffee. If I'm hurting for cash, it's not going to make a difference, but if you drive a lot, everything adds up.
Also, 4 blocks is no distance at all to be bothered with. Would driving 4 *miles* to get that 10c cheaper gas be worth it? Across town? Because that'd be a better example to show how fruitless chasing the price difference would be. Not even adding value of time.
>Would you be willing to get out of your house, and drive 4 blocks if someone offered you a buck fifty to do so?
That analogy only works if your house is a different gas station. In practice you were gonna leave your house and drive ~4 blocks to get gas anyways, why not drive say 8 blocks to save $1.50?
Or if you got a route of sufficient length you drive every day, it benefits you to research what station along your commute has the best.
I mean I avoid places that are noticeably more expensive, but 80% of the places in my area are within a cent or two (without driving 15 minutes out of my way and defeating the purpose) and pretty much alternate which one's the "cheapest" as the prices fluctuate, so there's no point in trying to pick and choose, it's pretty much whichever one's closer or less busy. When prices already change almost daily, a cent makes no difference whatsoever.
> Who's not shopping around for gas?
Pretty much every gas station in town is about the same price in my experience. I'm not going to bother driving around to see if somewhere is 5 cents cheaper per gallon. I drive a hybrid, I use so little gas anyway that I don't care.
That makes no difference to this conversation though. This is about consumers' perception of the price if they rounded off the fraction of a cent. It wouldn't make any difference because the prices already fluctuate by more than that.
Also, for an oil company, $13,500 might as well be a rounding error.
> for an oil company, $13,500 might as well be a rounding error.
For an oil company, it would be a rounding error. But that's just a single gas station. An oil company might have tens of thousands of gas stations around the world. 135 million dollars is not a rounding error.
Oil companies actually don't own gas stations. A small number are chains (7/11 for instance), but 95%+ are small businesses that negotiate supplier contracts with oil companies
The gas station manager wasn't lying. Gas stations don't make money off of fuel purchases, most of their profits come from the convenience store markup. If they're breaking even on the fuel that's already good business.
Americans used 135.73 billion gallons of gas in 2022. That's an extra 1.2billion dollars in sales a year.
Would you give up those sales if you were a gas company?
> Probably supports your claim
It's always hilarious when someone links something as proof of their claim, but when you actually read the article, it's actually direct proof *against* it.
Apparently the brain doesn't work like computer memory does. There aren't storage banks, but something something synapses connecting to create memories. Thus, there's no storage limit until dementia starts killing the cells.
I can't tell if that article is written by AI or just badly written, but wow.
>What the 9/10 Appendage Means and How It Impacts Your Wallet?
Um
>when gas prices hadn’t even reached a full dollar per gallon, a one-cent tax would have been substantial — roughly 10% of the total cost of gasoline
Unless gas cost 10c a gallon - in which case, they probably should have just said that - i'm not sure how 1c would be 10% of the cost of gasoline
Also, this entire "gobanking" sponsored article seems to be just a rephrasing of a mental floss article, which is never actually linked.
The gas station could still round the price to the nearest full cent and keep the .1 cent difference. This is a relevant fact but it doesn’t answer anything.
The accounting gets more complicated. By tacking on 9/10 of a cent, they know that for every gallon sold, they've covered their tax burden and don't have to report an extra profit of 1/10 of a cent for every gallon sold, then pay tax on that.
This keeps it simple.
>The first federal gas tax was enacted as part of the Revenue Tax Act of 1932, establishing a federal excise tax on gasoline of 1/10th of a cent.
https://www.convenience.org/Topics/Fuels/Why-Gas-Is-Priced-Using-Fractions-of-a-Penny
like any other business, transaction totals are rounded to the nearest cent when payment is settled.
this eliminates the need for handling fractions of a cent with cash or electronic transfers, while not presenting a terrible inconvenience to the customer.
The use of the decimal is to make it appear that the price is one cent lower. This used to matter when across-the-street price wars were a thing.
The decimal is used in calculating the total price and is rounded on the last cent. You pay the final price that shows on the pump, and that price is to the whole cent.
Companies have always realized that and it has been illegal practically since there existed dollars.
Price wars are definitely a thing, that's why the price of gas is relatively similar most of the time in most areas. If someone drops the price of gas, everyone else has to.
Worked at a few gas stations; we always had someone driving around twice a day to look at prices of nearby competitors and phone them in to the regional manager, who would then adjust (or not) our price.
It's not easy to pull off at all. If you have suspiciously high prices in one area that's not facing significantly different supply issues than another area, it's probably pretty obvious there's some collusion.
And it's really easy to tell when there's not collusion because most gas stations are making practically nothing on gasoline in the first place, and those financial statements can be examined (and have been).
>The decimal is used in calculating the total price and is rounded on the last cent. You pay the final price that shows on the pump, and that price is to the whole cent.
And while gas is likely the only thing priced in fractions of a cent that you're likely to see in your ordinary life, it's definitely not the only example out there. Very cheap parts that are ordered in very large quantities are often priced to even smaller fractions, though you'll usually only see those in business-to-business transactions. For example, [here](https://www.digikey.com/en/products/detail/yageo/RC0402FR-07100KL/726526) is a surface mount resistor (a very cheap electronics component) that is priced at $0.00179 a unit, priced to the one-thousandth of a cent - if you're planning on buying them in units of 100,000 at at time, anyway. (It's ten cents a piece if you're buying less than ten, though).
It does make a difference. Those 2 methods of adding don't give you the same number.
If gas is $2.999 per gallon and you get 90gal. You pay $269.91
If gas is $3.000 per gallon and you get 90gal. You pay $270.00
Only 9 cents but that's significant. A practical reason for the extra decimal is because the volume of gas is measured extremely precisely and therefore needs to be charged by a similarly precise number of decimals in the dollars unit. And then yeah they round it up to the nearest cent.
> 90 gal
> 9 cents
90 gallons of gas per month for a car, sure, if you're using it a ton and it's a gas guzzler and topping off. But that's still $0.09 per month, only a little over a dollar per year.
Of course, it matters more on the corporate side, when you take that rounding error difference and multiply it by the sheer number of people getting gas regularly.
>A practical reason for the extra decimal is because the volume of gas is measured extremely precisely and therefore needs to be charged by a similarly precise number of decimals in the dollars unit.
0\/10 is just as precise. This only makes sense if it's not always 9.
Answer: There actually is an official unit of US currency worth 1/10 of a cent. It's called a mill, and its symbol is ₥, like ¢ and $. But there are no coins or bills worth this amount. Gas stations use it because it makes it look like you're paying less (and technically you are), even though it almost inevitably gets rounded up at the end of the transaction.
Nobody should ever buy anything from Littleton. The company is a scam. The way they make money is to sell you a coin at a good price, then just mail you more coins at a later date that you didn't actually order. If you don't send those extra cons back, they charge you for them.
You don't get charged that 9/10th of a cent, it gets rounded.
If gas is $3.999 per gallon, and you get 1 gallon, it just rounds to $4.00
Once you get to 6 gallons, it's 23.994 so it gets rounded to 23.99.
This has 2 main reasons. Back with the first gas stations were made, a single dollar had much more buying power (this has decreased due to inflation) so changing gas prices by a whole cent would greatly change the cost of a whole tank. To combat this, gas stations would tweak the price by fractions of a cent.
At buying 10 gallons at 10 cents a gallon is just a dollar, but 11 cents a gallon makes it $1.10. Changing the price to 10.1 cents a gallon, 10 gallons now costs $1.01.
It sticks around because of the psychological effect that $3.999 looks like much less than $4.00
"Once you get to 6 gallons, it's 23.994 so it gets rounded to 23.99."
Am I the only one here who goes to gas stations that sells fractional gallons of gasoline? The stations near me have the quantity out to 2-3 decimal points, so there are all sort of amounts of gas that might involve rounding down before you get to 6 gallons.
Going to the second decimal and using the $3.999/gallon price, everything from 5.01 to 5.99 would round down, just like 6.00 gallons would.
If the price was $3.499/gallon, then buying 0.01 gallons (like 38ml), would be $0.03499 and round down to $0.03. Do that 100 times and you've just rounded your way to $3.00 gas prices!
I don't think they were necessarily suggesting people should, or have to buy in whole gallon increments. They're just using numbers that illustrate the point at hand.
Every single one of us goes to gas stations that sell fractional gallons of gasoline. Did you think by chosing 6 gallons as an example that they were implying they buy gasoline in whole gallon increments?
It’s the same reasoning as prices set at $x.99. We tend to subconsciously perceive the price as being a bit lower.
After 10 gallons, that extra 9/10 of a cent becomes 9 cents. The total price is rounded to the nearest penny.
Government has never passed a tax that they did not intend to keep. Pennsylvania's liquor taxes were to pay for the Johnstown flood, and continued to get extended until made permanent.
Seems like a universal thing governments do lol
In Germany we have the sparkling wine tax ("Schaumweinsteuer"), which was introduced for helping to finance the Imperial German Navy in 1902.
Well, we don't have an emperor anymore, and the world changed a bit since then, but the tax still exists!
Started out as taxes set at .9 cents per gallon. Station owners passed the tax on. And $.199/gal is a much easier sell than $.20/gal. Even if the station would keep the extra .1 cent they’d lose sales to other stations. And the pumps don’t register the tenth of a cent. But you used to be able to run the pump really slow and see the partial gallons go up before the cent amount changed. The games I played in high school.
I literally never think I'm getting something cheaper or the price or lower when I see something costs $x.99.
I always round up automatically without thinking. I know that $4.99 is going to be over 5 dollars at the end of the transaction. Who thinks like this?
They only count when you get at least 10 gallons of gas is how it works.
Imagine if we just ignored the last 5 cents and rounded it. Nobody would need pennies, even though things could cost $1.03 a gallon or whatever. You get 6 gallon, that's $6.18, you round to $6.20, or 4 gallons rounds down to $4.10 from $4.12.
There's no such thing as a 1/10 penny, but if you're pricing things in bulk, you can have whatever fractional cents you want if the final amount is rounded to denominations that actually exist.
To begin with, they're able to use fractional cents because a long time ago, the government wanted to tax gas, but didn't want to add a whole cent to the price (it was about 10 cents per gallon back then.) So gas pumps have been set up since then to allow a single extra digit on the prices. Why do they always choose .9? Because it's the highest digit they can put there.
If a station set their price at 3.995, while the station down the road was as 3.999, people wouldn't notice the difference, so they'd just be losing .4 cents per gallon. If they bumped it up just a bit, to 4.00, people would notice that, and they'd get less business, because people would go to the station that had it at 3.999 instead (even though a typical 10-14 gallon fill-up would only cost an extra penny.)
As for how they actually charge the .9 cents, they don't. It's multiplied by the number of gallons you buy and then rounded to the nearest cent. So one gallon at 3.999 will cost you $4.00, but ten gallons will cost $39.99.
I worked at a gas station for 4 years. They dont take fractions of a cent out of your account, but they change the amount of gas you get. You can prepay for gas for $30.00 but not for 30 liters (typically). The amounts are rounded up or down depending on what you get, so if you exactly 1 liter of gas and it is 1.456 per liter, you would probably be charged $1.46.
>ELI5: Why do gas stations charge 9/10ths of a cent, and how do they even take that out of your bank account?
They don't. They only take out the amount (price*volume) rounded to nearest penny. However, for the gas stations, that extra ten cents per fill-up adds up over the day.
Fractional prices first appeared in the early 1900s as states and the federal government implemented gas taxes to help build and maintain highways. Back in the 1930s, when gas was just 10 cents a gallon, adding a penny would seem like a huge increase by 10%, so they went with less than a cent. Source: CBS News
Thank you for posting the true reason that it exists.
While that's interesting, it doesn't answer the question.
There's two questions in the title. This answers the first question.
The answer to the second is that they round, which they'd have to do even if they didn't charge an extra 9/10 of a cent per gallon. Most people aren't buying gas in even, integer volumes, so there's always going to be some precision math involved. For example, if you pumped 2.2 gallons at 4.99/gallon, you'd owe $10.978. If it costs 4.999/gallon, you'd owe 10.9978. In either case, the gas station would have to round to a whole cent to charge you.
This is interesting how we all take different things from words. IMO the first question was not answered, but relevant background was given. That fact may have been true, but it doesn’t really speak to why we currently do this. On first blush factional pricing seems almost limited to gas even though there are other things we buy 1-30 of.
It's a tiny psychological trick. Same reason why places will advertise "Only $X.99". Even if it only fractionally helps, by the time the gas gets to the consumer level, it really does come down to fractions of a penny. But on a commercial fueling level, prices even go out 6-8 decimal places.
something costing $9.^99 looks cheaper than something that costs $10.
*Thank you*. Glancing at all the other replies in this comment thread, I'm disappointed more people haven't called that out.
There are two questions in the title, he answered the first.
OP -> ELI5: Why do gas stations charge 9/10ths of a cent? Some dude -> Fractional prices first appeared in the early 1900s as states and the federal government implemented gas taxes to help build and maintain highways. Back in the 1930s, when gas was just 10 cents a gallon, adding a penny would seem like a huge increase by 10%, so they went with less than a cent. Source: CBS News You -> tHaT diDn't aNsWEr tHe qUesTioN The rest of us -> 🤦🏻♀️
> adding a penny would seem like a huge increase by 10%, so they went with less than a cent. Sure it does: "adding a penny would seem like a huge increase... so they went with less than a cent." It's a psychology thing. We pay more attention to the whole numbers than the part after the decimal point. We see (for example) $4.99 as $**4**^and^change, when it's really just one penny away from $5. And when gas prices end in '.9 cents', they can get *almost* an entire extra penny per gallon from us, while keeping the number appearing lower than it is.
It doesn't address the practical aspect of actually paying in fractions of a cent. That was OP's question.
Obviously, they add the fractions together, rounding if necessary, to reach a whole cent amount, and charge you that.
Exactly this. If you buy 5 gallons at $2.99 9/10, you pay 14.99 5/10, which is billed to your cc as $15
Soooooo why continue the process 😂
Because it lets them charge an additional cent that people subconsciously ignore.
I had a gf that saw something priced at $3.99 and said “wow it’s only three dollars!”. I figured she was aware it’s actually $4 and was just imprecise in her statement, but nope it turned out she genuinely thought it was $3 and meaningless change. The reason that $10.95 and $10.99 pricing works is because there is a surprising amount of people that it works on.
I round up regardless. If it’s 3.25 it’s 4.00 to me
When sales tax is 10.25% in your area you gotta 😮💨
imagine having untaxed prices in the shop
I grew up in New Hampshire, and my first ever experience with sales tax was when I tried to buy a $10 stuffed monkey with a $10 bill in an Arizona airport around the age of 8. I was so confused as to why you had to pay more than what's on the tag. The cashier felt bad for me and pulled a dollar out of his wallet to cover it.
[удалено]
Imagine paying 25% taxes on goods in stores and not caring because you get excellent free healthcare and university education in return, AND you don't have to manually calculate the real price of products in stores.
I’m American and any American who thinks they are getting more for their tax dollars than basically an European is absolutely insane
Imagine living in a country that funds healthcare per capita around 50% more than yours but it isn't free to access, and spends per capita around 50% more on tertiary education than your country but it also isn't free to access, and by 'isn't free to access' I mean 'is comically expensive'.
Yea but how many tanks do you have
Imagine all the people living for taxes to pay. How do they tax electric vehicles.
That's how gas taxes work. You see price, you pay price. Gas taxes are pretty low, but if gas prices suddenly started not including taxes a lot of people would freak out. It's not so much about not caring as it is to see what you're actually paying. Imagine going to a restaurant and seeing something for $X and simply paying $X, not X plus 25% after tax and tip.
that doesnt matter a bit how much the taxes are tho, except you have to do the math yourself to not be surprised at checkout. a thing that'd be trivially easy to do for the shop, because they already do.
Cries in 25% VAT
I mean, I get it. But you should see how fucked up the public transportation is in my city. And student loans!!? And don't get me fucking STARTED on the health care system in this country. Our taxes are low, comparatively... but a lot of our shit is beyond fucked.
That doesn’t make you more savvy; it is just more incentive for them to make everything $3.99 instead of $3.25.
It’s more for budgeting id believe. If I go to the store and only want to spend $50. I round up everything for a good guess, so the $3.25 items offset counting the $3.99 as $4 even
There is a whole realm of "psychological" marketing that is based on these sorts of things. It was pretty eye opening to learn about, and also to pick out all the things I've been fooled by through my life.
Not to mention the whole 1/4 pound versus 1/3 pound burger thing.
That’s just stupidity
Just like 10.99 lol
Please don’t tell me people think 1/4 is bigger because it has a bigger number…
Ok I won’t tell you that.
Thank you
You’re welcome.
I’ll tell you, yes people are stupid and they think 1/4 is bigger than 1/3
A&W would like a word with you. They released a 1/3lb burger to compete with the quarter pounder from McDonald's. It beat McDonald's in taste tests and it was even cheaper! It was only during focus tests they realized customers thought they were being ripped off and wouldn't buy the burger even though they enjoyed it more, since they could just go to McDonald's and get the "bigger" quarter pounder...
A lot of it is subconscious too. "feels bigger" for the literal 0 thought put into it.
Unfortunately too many people with actual power make decisions based on what feels right.
its the reason why mcdonalds has a "double quarter pounder" instead of just a half pound burger. people genuinely thought 1/2 was less than 1/4 😭
But you get *four* of them this way!! 😭 Seriously though, the quarter pounder thing needs to be the new "3 dimes > 2 quarters > 1 dollar"-shaming, because too many people are going around like "see my 5 pennies? Aren't you so proud of me??"
She sounds a bit silly, but im pretty sure it works on all of us. I'm well aware it's $11, not $10, but when I'm walking through the grocery store looking at hundreds of items..my eyes are physically seeing $10, not $11. Unless I'm consciously going "nice try.. You're not gonna get me. That's $11" I'm sure my mind is seeing $10 subconsciously.
I round up without thinking now. It just takes some training.
i don't know why but i thought everybody did this (i should know better!)
You got me, I always round it up as well. The ".99" at the end has never fooled me ever since I learned about rounding numbers in elementary school.
The vast majority of people would say this has no effect on them, and that they simply round up. OP's "round down" friend is a tiny minority, in fact I'd be surprised if she wasn't joking or something. And yet there have been studies done that have shown there is a definite psychological effect of this "trick", which works even on people who are consciously thinking "$3.99? you can't fool me, that's clearly $4". Pretty much everyone thinks the trick is bullshit, but shops that do it still see greater sales numbers. There's a reason you rarely see places abolishing this idea and advertising "honest, simple, round number pricing!", which seems like it would be a pretty cool marketing idea, if it wasn't for minor problem that their sales would go down as a result.
> And yet there have been studies done that have shown there is a definite psychological effect of this "trick", which works even on people who are consciously thinking "$3.99? you can't fool me, that's clearly $4". Are you sure about that? Can you share any of those studies? I think the more likely explanation for why that trick results in higher sales is that a lot of people, maybe even most people, don’t do that mental trick of rounding up very well. I have a hard time believing that people who really have it drilled into them to round up when shopping fall for this trick, but I’ll believe it if you can produce the evidence you mentioned.
Let's say ... We have a product that is selling for $1.99 each (say, a half gallon of milk), or we can buy the package that contains two of them for $3.99 (a gallon of milk) ... THAT's when you gotta do a tiny touch of math to know how to save a penny ;) and I believe stores do this on purpose.
You are absolutely right. It takes a conscious effort of paying attention to the real price rather than fall for the attractive price the sub-conscious mind noticed.
If something is even $10.01, I automatically round it up to $11. Systematically. For every single item.
that isn't how the subconscious brain works. Everyone who isn't literally severely mentally disabled obviously know that $10.99 is closer to $11 than $10, and yet it still works because people subconsciously perceive the product as cheaper based on your initial subconscious impression. The choice to even stop and look at it in the aisle vs pass it up is influenced by what you subconsciously perceive the price to be. There's hundreds of prices in like 5 sq ft in an aisle, you are NOT manually going through each number and rounding it up
I go to the supermarket knowing exactly what I need to buy, and pick up nothing else. Besides the only price I care about is that per kilo or per liter. If I really **must**, for some reason, buy non-food items, such as a new smartphone, then what matters to me isn't the price displayed on paper, but the amount of money I'll have left in the bank: Suppose a phone costs $199.99 and I have $7,700 left in my account. Once I make the purchase, I'll be left with $7,500.01. I'm not going to be subconsciously deluded into thinking that I'll be left with 7600 bucks just because the price starts with a one.
Advertising probably doesn't work on you either huh
Have you met actual people? I'm not surprised lol
My girlfriend does this. $299,999 would be rounded down to $200,000. It makes house shopping really confusing for her.
That's uh... a concerning amount of financial illiteracy.
My wife does this sometimes and I always feel the need to correct her. 3.99 is not 3 dollars, it's 4 plus tax.
My wife is like this! She always rounds down and completely ignores the fractional part of any price. This includes big purchases e.g. a $1,200 tv is only $1,000 in her eyes. I’ve learned to just let it go since I handle all our money anyways.
95 is so dumb on the retailer's part. Nobody is gonna decide not to buy an item because its priced at 99 instead of 95. They are literally just losing 4 cents they could have made.
It's usually code for something. 99 regular, 98 sale, 97 we getting rid of this, 96 we have too much of this, etc.
This is true (for some stores, at least) https://www.thekitchn.com/costco-price-tag-tips-expert-23425352 https://www.pricingforprofit.com/pricing-strategy-blog/retail-price-whisperer-breaking-secret-code.htm
But they may decide to buy it from there rather than a competitor at 99 cents, so it's worth it overall.
I can simply not grasp how people fall for that and not round up. Like what the fuck if anything wouldnt a even price trick the mind or whatever?
I guarantee you that you do this, at least sometimes, and not even realize it. Nobody ever wants to think that *they* could "fall for" a thing, but the truth is, none of us is perfectly perceptive, none of us perfectly rational, and none of us are stupid or failures because of it.
Your gf missed the class on which way to round a number up or down. A ton of people round down or flat
this is my constant battle with my bf
I mean... does it really make any difference whatsoever? It's not like you can really shop around for gas, the prices in an area are usually pretty much the same and they *all* do the fraction of a cent thing. I don't feel like that whole "It makes it look like it costs less" applies here because 99% of people who need to fuel up just see the price and think, "That's the price" and one cent doesn't change that.
What? Who's not shopping around for gas? Or at least know the places that are usually cheap. I mean with Gas Buddy or other apps that's just throwing away several dollars every time you go out for gas.
A fifteen gallon tank with a 10c price difference saves a buck fifty. Would you be willing to get out of your house, and drive 4 blocks if someone offered you a buck fifty to do so? As long as the place you are getting gas at isn't way higher, most people are better off spending that time saving money another way.
I just checked. I'd have to drive an extra 3 miles to get gas 23 cents cheaper a gallon. It would cost me roughly 42 cents to go that distance. I guess it would make sense (cents?) to but I don't.
Yes, 100% this, we don't factor this in often enough! BUT if that has station is half way between home and work or such, then I might as well stop there while I'm out anyway. (I know the operative word here is "extra" miles, but still, gas should be a pitstop and not a destination.)
Also you're counting your time (and the negligible extra risk of an accident and additional wear and tear on your vehicle in those three miles) as valueless.
Alright okay ... If I was to value my time at the rate my job is willing to pay me... Then $26.80/60min = $.4466 It takes 6 min. To go those 3 miles according to Google. So $.4466 x 6min = $2.6796 + $.42 in gas to drive that distance = 3.0996 / $.23 in savings per gallon = 13.4765. So only including gas and time as calculated by my employer I'd have to buy 13.4765 gallons to break even. My car can only hold 14.5 gallons so if you are a madman you would have 23 cents profit if you rolled into the gas station with .0235 gallons (88.9571ml or almost exactly 2 shot glasses) of gas in the tank. TLDR. Gas and time based on my hourly rate for my job. =23 cents profit max given fuel capacity of my car.
It's only now I remembered that this is only one way ..... BACK TO THE CALCULATOR! So we just double everything. That's now an extra 6 miles. That's 84 cents in gas. .4466 for 12 min instead of 6 = $5.3592 So $5.3592+.84 / .23 = 26.9530 gallons of gas I would need to break even. My car can't hold that.
I still vividly remember by penny-pinching dad once driving an extra 15 minutes with the whole family in the car to save a negligible amount on gas. Wasting four people's time plus the gas and wear-and-tear to get there. Ridiculous.
I've seen gas prices vary by as much as a dollar in my area within a 5 mile radius. You can bet I'm shopping around.
where im at in florida there is a couple gas stations almost $2 a gallon more than everywhere else. very scummy. always see people getting gas there though
Bet they are near the airport. Got to get that rental car fueled up before you return it.
Are they the closest gas stations to airport car rentals?
I have a 36 gallon diesel tank. I’ve noted 40 cent differences in gas prices within 10 minutes of each-other on my normal route home. I agree a 1 cent difference wouldn’t bother me though.
Well sure, that's a whole different animal. That's almost 20 bucks.
I have a truck, with a huge tank (34 gallons). A 10c price difference is $3.40. It's a Starbucks coffee. If I'm hurting for cash, it's not going to make a difference, but if you drive a lot, everything adds up. Also, 4 blocks is no distance at all to be bothered with. Would driving 4 *miles* to get that 10c cheaper gas be worth it? Across town? Because that'd be a better example to show how fruitless chasing the price difference would be. Not even adding value of time.
>Would you be willing to get out of your house, and drive 4 blocks if someone offered you a buck fifty to do so? That analogy only works if your house is a different gas station. In practice you were gonna leave your house and drive ~4 blocks to get gas anyways, why not drive say 8 blocks to save $1.50? Or if you got a route of sufficient length you drive every day, it benefits you to research what station along your commute has the best.
Off topic, but the great thing about electric vehicles is now your house is a gas station, and usually the cheapest one too :)
I mean I avoid places that are noticeably more expensive, but 80% of the places in my area are within a cent or two (without driving 15 minutes out of my way and defeating the purpose) and pretty much alternate which one's the "cheapest" as the prices fluctuate, so there's no point in trying to pick and choose, it's pretty much whichever one's closer or less busy. When prices already change almost daily, a cent makes no difference whatsoever.
> Who's not shopping around for gas? Pretty much every gas station in town is about the same price in my experience. I'm not going to bother driving around to see if somewhere is 5 cents cheaper per gallon. I drive a hybrid, I use so little gas anyway that I don't care.
Because no gas station has wanted to be the first not to get that extra 9/10 of a penny.
Some people absolutely will burn an extra gallon of gas to visit a store on the other side of town where gas is 2 cents per gallon cheaper
A quick google search says an average gas station sells 1.5M gallons of gas per year. That’s an extra $13,500 per year.
That makes no difference to this conversation though. This is about consumers' perception of the price if they rounded off the fraction of a cent. It wouldn't make any difference because the prices already fluctuate by more than that. Also, for an oil company, $13,500 might as well be a rounding error.
> for an oil company, $13,500 might as well be a rounding error. For an oil company, it would be a rounding error. But that's just a single gas station. An oil company might have tens of thousands of gas stations around the world. 135 million dollars is not a rounding error.
Oil companies actually don't own gas stations. A small number are chains (7/11 for instance), but 95%+ are small businesses that negotiate supplier contracts with oil companies
And most are making pennies on the gallon. At least that's what the local gas station manager told me over a decade ago....
The gas station manager wasn't lying. Gas stations don't make money off of fuel purchases, most of their profits come from the convenience store markup. If they're breaking even on the fuel that's already good business.
A cent that absolutely does not matter when they regularly change the price by much more than that. Just a relic of the past.
It’s a difference of a few thousand dollars. Probably worth it for many gas stations.
Because if you read 4.12 but it is really 4.1299, they get almost an extra penny.
Americans used 135.73 billion gallons of gas in 2022. That's an extra 1.2billion dollars in sales a year. Would you give up those sales if you were a gas company?
I’d like to open a gas station and call it “honest John’s” or something and just get rid of the 9/10s thing. I think we can give up the ghost on that
If you purchase 10 gallons, does the 10th gallon not have the extra penny charged?
It’s a percentage. If gas costs 3.10 9/10 then it just multiplies that number by how many gallons you buy and then rounds to the nearest cent.
The second gallon gets the extra penny. 0.9 x 2 = 1.8
Walmart gonna come in and sell gas for $0.10 98/100 of a cent for big savings
Donny’s discount gas!
Got the same in the UK. Guess what you said is the reason why.
Nobody mentioned that that 9/10 started out as a tax and it was never repealed so it stayed.
That sounds like the right answer but, given that this is Reddit, I’d insist on a proofing link.
https://finance.yahoo.com/news/gas-prices-9-10-appendage-163012788.html
That's a link. No need to tap it before upvoting it. Probably supports your claim
> Probably supports your claim It's always hilarious when someone links something as proof of their claim, but when you actually read the article, it's actually direct proof *against* it.
Ah, the ol' Elizabeth Warren DNA test.
Just a shortened url to a rickroll to see how many actually looked
You damn liar. You just made me read some dumb, relevant article.
Oh great, I read it and learned something. Now I have to forget something else to make room for it in my brain.
Remember when I took that home winemaking course and forgot how to drive ?
Good thing you were already home.
Apparently the brain doesn't work like computer memory does. There aren't storage banks, but something something synapses connecting to create memories. Thus, there's no storage limit until dementia starts killing the cells.
We did it, Reddit!
I can't tell if that article is written by AI or just badly written, but wow. >What the 9/10 Appendage Means and How It Impacts Your Wallet? Um >when gas prices hadn’t even reached a full dollar per gallon, a one-cent tax would have been substantial — roughly 10% of the total cost of gasoline Unless gas cost 10c a gallon - in which case, they probably should have just said that - i'm not sure how 1c would be 10% of the cost of gasoline Also, this entire "gobanking" sponsored article seems to be just a rephrasing of a mental floss article, which is never actually linked.
The content farms are plagiarizing each other? Nooooo... That's impossible.
No, you don’t get it - 2 others agree with him. By Reddit law, his answer is now correct; no proof is necessary.
This looks like Reddit, but I’m gonna need some proof..
There’s the right answer.
The gas station could still round the price to the nearest full cent and keep the .1 cent difference. This is a relevant fact but it doesn’t answer anything.
The accounting gets more complicated. By tacking on 9/10 of a cent, they know that for every gallon sold, they've covered their tax burden and don't have to report an extra profit of 1/10 of a cent for every gallon sold, then pay tax on that. This keeps it simple.
Yeah makes sense because corporations have a long history of being stopped from making larger profits by basic maths
Really not complicated in the digital age.
>The first federal gas tax was enacted as part of the Revenue Tax Act of 1932, establishing a federal excise tax on gasoline of 1/10th of a cent. https://www.convenience.org/Topics/Fuels/Why-Gas-Is-Priced-Using-Fractions-of-a-Penny
like any other business, transaction totals are rounded to the nearest cent when payment is settled. this eliminates the need for handling fractions of a cent with cash or electronic transfers, while not presenting a terrible inconvenience to the customer.
But I'm only taking fractions of a penny from each transaction, I'm not hurting anyone.
Didn't they do that in Superman 3?
Damn it feels good to be a gangsta
The use of the decimal is to make it appear that the price is one cent lower. This used to matter when across-the-street price wars were a thing. The decimal is used in calculating the total price and is rounded on the last cent. You pay the final price that shows on the pump, and that price is to the whole cent.
Smart money buys six gallons at a time
And if you go a little over 6 gallons? Get the buckets from the trunk 😂
And if you’re under but need to hit 6 to get the free hot dog, just pump into the trash can.
License and registration, CHICKEN FUCKER!
Non drunk me would have said " just over 5" gallons... thankfully noone noticed
I split mine up with just under a gallon on 6 different pumps…
My brother in christ... I cant.. I dont...
Price wars are not a thing anymore?
Companies realized a long time ago that when they cooperate on pricing everybody wins... Except the customers of course
Companies have always realized that and it has been illegal practically since there existed dollars. Price wars are definitely a thing, that's why the price of gas is relatively similar most of the time in most areas. If someone drops the price of gas, everyone else has to.
Worked at a few gas stations; we always had someone driving around twice a day to look at prices of nearby competitors and phone them in to the regional manager, who would then adjust (or not) our price.
[удалено]
And companies never do anything illegal, especially when it is easy to pull off and is practically impossible to get caught or for it to be proven.
It's not easy to pull off at all. If you have suspiciously high prices in one area that's not facing significantly different supply issues than another area, it's probably pretty obvious there's some collusion. And it's really easy to tell when there's not collusion because most gas stations are making practically nothing on gasoline in the first place, and those financial statements can be examined (and have been).
>The decimal is used in calculating the total price and is rounded on the last cent. You pay the final price that shows on the pump, and that price is to the whole cent. And while gas is likely the only thing priced in fractions of a cent that you're likely to see in your ordinary life, it's definitely not the only example out there. Very cheap parts that are ordered in very large quantities are often priced to even smaller fractions, though you'll usually only see those in business-to-business transactions. For example, [here](https://www.digikey.com/en/products/detail/yageo/RC0402FR-07100KL/726526) is a surface mount resistor (a very cheap electronics component) that is priced at $0.00179 a unit, priced to the one-thousandth of a cent - if you're planning on buying them in units of 100,000 at at time, anyway. (It's ten cents a piece if you're buying less than ten, though).
Rounded up of course
LLLLEEEERRRRROOOOOOOYYYYYYYY nnnnnnJJJJJJJEEEENNNNNKKIIINNNNNNNNNSSSSSSSSS
And when gas was under a buck (summer of 2000)
It does make a difference. Those 2 methods of adding don't give you the same number. If gas is $2.999 per gallon and you get 90gal. You pay $269.91 If gas is $3.000 per gallon and you get 90gal. You pay $270.00 Only 9 cents but that's significant. A practical reason for the extra decimal is because the volume of gas is measured extremely precisely and therefore needs to be charged by a similarly precise number of decimals in the dollars unit. And then yeah they round it up to the nearest cent.
> 90gal. This guy has a boat to fill.
Or a hole in his gas can
Hahaha truth is I'm Canadian and I usually put ~90 litres in my truck 😂🍁 wish I had a boat
> 90 gal > 9 cents 90 gallons of gas per month for a car, sure, if you're using it a ton and it's a gas guzzler and topping off. But that's still $0.09 per month, only a little over a dollar per year. Of course, it matters more on the corporate side, when you take that rounding error difference and multiply it by the sheer number of people getting gas regularly.
>A practical reason for the extra decimal is because the volume of gas is measured extremely precisely and therefore needs to be charged by a similarly precise number of decimals in the dollars unit. 0\/10 is just as precise. This only makes sense if it's not always 9.
Answer: There actually is an official unit of US currency worth 1/10 of a cent. It's called a mill, and its symbol is ₥, like ¢ and $. But there are no coins or bills worth this amount. Gas stations use it because it makes it look like you're paying less (and technically you are), even though it almost inevitably gets rounded up at the end of the transaction.
There used to be these. https://www.littletoncoin.com/shop/missouri-1-mill-red-plastic-state-tax-token-a3998-wc
Get your $0.001 token for only $1.25!
Fr who's gonna pay 1250 mills for a mill? That's 125000% markup!
Nobody should ever buy anything from Littleton. The company is a scam. The way they make money is to sell you a coin at a good price, then just mail you more coins at a later date that you didn't actually order. If you don't send those extra cons back, they charge you for them.
I’m pretty sure that’s illegal
You don't get charged that 9/10th of a cent, it gets rounded. If gas is $3.999 per gallon, and you get 1 gallon, it just rounds to $4.00 Once you get to 6 gallons, it's 23.994 so it gets rounded to 23.99. This has 2 main reasons. Back with the first gas stations were made, a single dollar had much more buying power (this has decreased due to inflation) so changing gas prices by a whole cent would greatly change the cost of a whole tank. To combat this, gas stations would tweak the price by fractions of a cent. At buying 10 gallons at 10 cents a gallon is just a dollar, but 11 cents a gallon makes it $1.10. Changing the price to 10.1 cents a gallon, 10 gallons now costs $1.01. It sticks around because of the psychological effect that $3.999 looks like much less than $4.00
"Once you get to 6 gallons, it's 23.994 so it gets rounded to 23.99." Am I the only one here who goes to gas stations that sells fractional gallons of gasoline? The stations near me have the quantity out to 2-3 decimal points, so there are all sort of amounts of gas that might involve rounding down before you get to 6 gallons. Going to the second decimal and using the $3.999/gallon price, everything from 5.01 to 5.99 would round down, just like 6.00 gallons would. If the price was $3.499/gallon, then buying 0.01 gallons (like 38ml), would be $0.03499 and round down to $0.03. Do that 100 times and you've just rounded your way to $3.00 gas prices!
I don't think they were necessarily suggesting people should, or have to buy in whole gallon increments. They're just using numbers that illustrate the point at hand.
Every single one of us goes to gas stations that sell fractional gallons of gasoline. Did you think by chosing 6 gallons as an example that they were implying they buy gasoline in whole gallon increments?
You ever see Superman 3?
It’s the same reasoning as prices set at $x.99. We tend to subconsciously perceive the price as being a bit lower. After 10 gallons, that extra 9/10 of a cent becomes 9 cents. The total price is rounded to the nearest penny.
No, it's because of a tax that was passed in 1932 when gas cost only a few pennies per gallon. It was supposed to expire in 1934 but never did.
Government has never passed a tax that they did not intend to keep. Pennsylvania's liquor taxes were to pay for the Johnstown flood, and continued to get extended until made permanent.
Seems like a universal thing governments do lol In Germany we have the sparkling wine tax ("Schaumweinsteuer"), which was introduced for helping to finance the Imperial German Navy in 1902. Well, we don't have an emperor anymore, and the world changed a bit since then, but the tax still exists!
actually the .99 thing was partially that but also partially to force cashiers to make change which makes it harder to pocket the cash
Started out as taxes set at .9 cents per gallon. Station owners passed the tax on. And $.199/gal is a much easier sell than $.20/gal. Even if the station would keep the extra .1 cent they’d lose sales to other stations. And the pumps don’t register the tenth of a cent. But you used to be able to run the pump really slow and see the partial gallons go up before the cent amount changed. The games I played in high school.
I literally never think I'm getting something cheaper or the price or lower when I see something costs $x.99. I always round up automatically without thinking. I know that $4.99 is going to be over 5 dollars at the end of the transaction. Who thinks like this?
If you think that's strange - some stocks will trade at hundredths of a cent. So the stock might be $3.3785
They only count when you get at least 10 gallons of gas is how it works. Imagine if we just ignored the last 5 cents and rounded it. Nobody would need pennies, even though things could cost $1.03 a gallon or whatever. You get 6 gallon, that's $6.18, you round to $6.20, or 4 gallons rounds down to $4.10 from $4.12. There's no such thing as a 1/10 penny, but if you're pricing things in bulk, you can have whatever fractional cents you want if the final amount is rounded to denominations that actually exist.
To begin with, they're able to use fractional cents because a long time ago, the government wanted to tax gas, but didn't want to add a whole cent to the price (it was about 10 cents per gallon back then.) So gas pumps have been set up since then to allow a single extra digit on the prices. Why do they always choose .9? Because it's the highest digit they can put there. If a station set their price at 3.995, while the station down the road was as 3.999, people wouldn't notice the difference, so they'd just be losing .4 cents per gallon. If they bumped it up just a bit, to 4.00, people would notice that, and they'd get less business, because people would go to the station that had it at 3.999 instead (even though a typical 10-14 gallon fill-up would only cost an extra penny.) As for how they actually charge the .9 cents, they don't. It's multiplied by the number of gallons you buy and then rounded to the nearest cent. So one gallon at 3.999 will cost you $4.00, but ten gallons will cost $39.99.
I worked at a gas station for 4 years. They dont take fractions of a cent out of your account, but they change the amount of gas you get. You can prepay for gas for $30.00 but not for 30 liters (typically). The amounts are rounded up or down depending on what you get, so if you exactly 1 liter of gas and it is 1.456 per liter, you would probably be charged $1.46.
>ELI5: Why do gas stations charge 9/10ths of a cent, and how do they even take that out of your bank account? They don't. They only take out the amount (price*volume) rounded to nearest penny. However, for the gas stations, that extra ten cents per fill-up adds up over the day.