No, it's aimed at business credit card authorization amounts. Many companies have policies like 'Tier 1 managers can authorize up to $100, Tier 2 managers can authorize up to $250, Tier 3 managers up to $5000' so you are trying to hit a number that makes the purchaser go 'I can get that purchase done without having to go too far up my chain of command' rather than 'I need to convince my grand-boss, who MIGHT know my name, to buy this software to solve my problem'

While true, it really makes me wish the large companies would add 1 to all those tiers, so we wouldn't have to play along with pricing psychology - as someone else noted, you look at 499 and see 500, but there may be a difference in 500 tier authorization. So while I hate seeing 9's in prices, I understand that's a sensible way to go. At least in the higher range of prices.

>they aren't really paying $500... they are paying $499.

I think most, if not all, business customers know the x99 pricing is a psychological gimmick and since it's well known is it really a gimmick any longer? When I see $499 I immediately think $500

Because it still works. Even if a person knows the psychology hacks behind things they are still susceptible to them. In fact, people that know about them falsely believe that since they are aware of them they don't work on them.

Has that been studied? I frankly find it hard to believe.

My argument is that wouldn't that apply to $X.99 pricing as well? If everyone knows it, why do it? Why is it bad?

I think the idea that this practice signals cheapness is more theoretical than anything. Does a car priced at $54,990 signal cheapness? Certainly not for me. The practice is just too ubiquitous at this point.

I think the idea is that the nines trick generally works, but having four nines and pricing down to the cents in such a large price makes the trick a little too insultingly obvious.

It works even though it looks cheesy.