Price anchoring
A reference number makes the actual price look like a deal or a rip-off.
What it means
The application of anchoring to pricing, in which an initial or adjacent number — a 'compare at' price, a crossed-out original, a high-end item nearby — sets the standard against which a target price is judged. Because people evaluate prices relative to a reference rather than in absolute terms, a high anchor makes the selling price feel reasonable and a low anchor makes it feel expensive, even when the anchor is arbitrary or fictitious. Marketers deploy it through manufacturer's suggested retail prices, premium decoys, and 'was/now' framing. It matters as a foundational mechanism behind discounts, tiering, and perceived value.
Examples
Listing 'Was $200, now $99' makes $99 feel like a bargain, anchoring value to the $200.
Menus print a £95 steak at the top not to sell it, but to make the £38 one just beneath it read as the sensible choice.
A house listed at £600,000 and cut to £540,000 feels like a win; the identical house listed at £540,000 from the start invites offers below it.
First described in Application of Tversky & Kahneman (1974); Northcraft & Neale (1987).