Many years ago, 99 Cents Only Stores charged 99₵ for most of the items sold in our stores. As our loyal customers know, we long ago changed this pricing policy to provide our customers with a wider assortment of product offerings and extreme value products, as well as to keep pace with rising operating costs. Despite these changes, we have maintained our trademarked name to prevent customer confusion and to make sure our customers know who we are and that we are continuing to provide the same quality and value as always.
One change came in 2008 when the Company added a charge of .99 cents (99/100 of one cent) to the base unit price for most merchandise. As a result, currently, the most common price point for items in our stores is 99.99 cents. In almost all instances, this price will round up to one dollar at the register and that is the amount a customer will be charged. The overall impact of this pricing change was to increase prices for our merchandise by one penny.
The second change came when, to provide our customers with an even more convenient shopping experience, we began offering some items at prices over $1.00, including milk, butter, eggs and a broad selection of general and seasonal merchandise. The Company discloses the prices of these items on the product itself, on shelf tags, at the point of sale, or on other signage.
The price we charge for the items we sell appears in total form on the register display before the purchase is made. This is the price that a customer will be charged for the purchase. If a customer does not believe this price is correct, or does not wish to pay it, the customer can choose not to complete the transaction. We are committed to making sure no transaction is completed unless and until the price is acceptable to our customers. When the final price is tallied and displayed on the register, customers have the opportunity then not to complete the transaction. Once the purchase is made, a customer has agreed to the purchase price. It is important that customers with any concerns or questions about pricing not proceed before the transaction is completed and payment is made.
Put simply, the total price that appears on the register is the total price we are charging, after rounding and with applicable tax added, for the items a customer has selected. If a customer completes the transaction and pays this price, he or she is agreeing to this price for the items selected and presented for purchase.
The following explains (1) how our 99/100 of a cent pricing works; and (2) when items will cost 99.99 cents (subject to rounding and therefore usually one dollar) as opposed to another (often higher) price.
1. How 99.99 Cents Pricing and the Associated Rounding Works
a. General Overview and Examples.
If the base price of an item is 99.99 cents, then the purchase price, after rounding, will be $1.00 if no other purchases are made at the same time. Purchases of a single item will round up to the nearest penny. An item priced at 39.99 cents will round to 40 cents; an item at 79.99 cents will round to 80 cents, and so forth.
This sample transaction shows the point:
Single Item Purchase. List price: 99.99 cents: Actual Purchase Price: $1.00
Sometimes, this base price is applied to multiple items. For example, two candy bars might be priced at the single price of 99.99 cents for the two bars. In this case, the purchase price for these two candy bars would be $1.00 after the rounding, assuming no other purchases at that time as follows:
Single Purchase of Items Grouped for Sale at Base Price (for example, 2 candy bars for 99.99 cents). List price: 99.99 cents for two candy bars: Actual Purchase Price: $1.00 for the two candy bars
Because purchases that result in a subtotal (before tax) less than .5 cent round down and those that result in .5 cent or more round up, at a certain quantity, the fractional pricing will result in downward rounding for the one item resulting in this tipping point. But, such rounding down is very rare and limited to these situations.
b. Rounding for Items Sold by Weight.
We sell some items by weight, such as produce that is sold at a certain price per pound. For these products, the price will normally not include a fractional price, such as a price with the added charge of .99 cents (99/100 of one cent). Instead, the per weight (i.e., per pound or per ounce) price of these items will be prices such as 49 cents per pound, 69 cents per pound, etc.
Because the actual weight of these items varies, the prices charged for these items will usually contain fractions and require associated rounding. In these situations, the price will initially be calculated to the fourth decimal place and then rounded to two decimal places per standard rounding principles. That item price will be displayed on the video screen visible to the customer as the per item price, prior to the calculation of the final subtotal. Sometimes, the purchase of multiple weighted items will cause the final subtotal to be slightly more or slightly less than the sum of the individual (rounded) prices displayed on the video screen. This is because our system retains the prices calculated to the fourth decimal place for purposes of subtotal calculation, and it uses those figures in the subtotal calculation. For these products, the final subtotal to be charged (as well as the total including sales tax) will be displayed on the video screen before the purchase is made.
c. Final Purchase Price and Application of Sales Tax.
The rounding procedures described above are used to determine the final subtotal price, which is the price prior to the application of any applicable sales or other taxes. Using the procedures above, the subtotal is calculated and stated to the second decimal point on the video screen, i.e., $9.40 or $55.99. The sales tax is applied to this subtotal.
Because many sales taxes rates are expressed to the fourth decimal point, the application of the pertinent tax rate to the subtotal may once again need to be rounded to the second decimal point, i.e., the nearest cent (not any fractions of a cent). Once this rounding is complete, the final sales price (including tax) is calculated and expressed on the video screen prior to the completion of the transaction.
2. What Items in the Stores Are Priced at 99.99 Cents and What Items Cost More or Less.
Many items in the store are priced at 99.99 cents. However, we also offer items (or groups of items) at prices lower than 99.99 cents. Generally, these items will have shelf labels or other displays stating their price.
Customers visiting our stores should understand that we offer many items at prices above 99.99 cents. Generally, these items (including, just for example, milk, toys and seasonal merchandise) will have their own individual price labels, or there will be a shelf label or display where these items are put out for selection, and these labels or displays will state the price. These products are very popular and provide our customers with a unique assortment of extreme value products.
At the cash register, the price charged for each item selected will appear on the display screen before the purchase is made. That is the price a customer is being charged. If a customer does not wish to purchase an item after seeing the price displayed on the screen, the customer can simply inform the cashier that he or she does not wish to purchase the item, and it will be removed from the purchase.