Blog homeOne question that I haven’t really got my head around fully is the problem with rounding sale prices (or perhaps marking down to a 999 price)
For example, take a 1000 GBP tour.
Should you sell it at
999 GBP
1000 GBP ex sales tax (VAT / TVA) (so price inc. tax is not rounded)
1000 GBP inc sales tax (VAT / TVA)
The questions I have are:
- Do you want to have a rounded price pre-tax…. or should it be a rounded price post-tax
- Is it the total for the booking that needs to be rounded - or individual components (such as the tour, the insurance, the transfer etc)?
The reason that rounding sale prices is becoming more of a problem for travel companies recently is for a couple of reasons:
- Trading standards (in the UK) now require all up front prices to include mandatory fees and components (you can’t add fuel surcharges at the end of the booking process)
- Many new generation tour operator systems now work on “Cost +” rather than “Sales price” driven - meaning that the company loads their costs and their preferred markup % - and then the system devises the sale price at point of sale. (Previously systems worked with commercial people loading sales prices - which could be nicely manually rounded if so desired)
- Websites are now trading in multiple marketplaces - so the price that is on sale in a specific region may be post an exchange rate conversion from an originally loaded rounded price - which has the impact of introducing some horrible decimal place prices.
So should we be concerned about rounding prices - and if so - should we be rounding total booking prices - or individual component prices? Anyone any thoughts?
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I guess it depends onwhich price is being used as the bait for the traveler. If it’s the post-tax rate, then that would, imho, be the amount to round down.
999 GBP inc sales tax (VAT / TVA) and with all taxes (airport, etc)
that what we see in France.
Consumers don’t want bad surprise
Happy new year
Claude