Even though you and I clearly know the difference between $8.99 and $9, even a slight modification to a numbers can affect our buying habits. According to Manoj Thomas and Vicki Morwitz from New York University, your perception of the price generally changes not because of the "ending [of] the price," but rather because of the "change in the left-most digit" (Manoj). Essentially, the reduction of the left most digit gives the appearance of a significantly lower price. However, as found by one researcher, H. G. Parsa, the .99 ending is not always a good idea. Mr. Parsa found that "many believe that just-below prices (another term for the .99 ending) connote good value and round-number prices connote high quality." Perhaps this is because of the number of zeros in the price. Parsa continued to explain the other reasons a person might not want to use just-below prices. In addition to lowering perceived quality, the .99 price will "give an impression of not being fully honest or straightforward, and involve inconvenience in calculating or communicating the price or in making change." (Parsa) As a result, higher-end brands may not want to use this. Numbers are clearly manipulated in many ways depending on what effect a stores wants to have.
There are probably psychological effects for all the digits between 00 and 99 as well, so keep a look out and think about this next time you're shopping!