Reduce the “left digit” by one to create a sense of a cheaper value proposition to the customer
What? This is making the price smaller by one point.
Why? This is known as charm pricing and simply works.
Charm pricing is most effective when the left digit changes. A one-cent difference between $3.80 and $3.79 won’t matter. However, a one-cent difference between $3.00 and $2.99 will make a huge difference.