"It is not the length of the price in digits that determines how difficult it is to memorize, but rather how many syllables this price has when read," explain Marc Vanheule, Gilles Laurent (both HEC School of Management, Paris), Xavier Dreze (University of Pennsylvania), and Bobby Calder (Northwestern University). "Faster speakers are better at immediate price recall because they can fit more syllables into the phonological loop."
In a study forthcoming in the September issue of the Journal of Consumer Research, the authors show that people who use memorization techniques to shorten the number of syllables have better recall (e.g. read 5,325 as 'five three two five' as opposed to 'five thousand three hundred and twenty five'). Interestingly, the researchers also found that Hungarians, who tend to be faster speakers, have better price recall.
However, consumers store information both verbally and visually, say the researchers. Thus, unusual looking prices, such as $8.88, are recalled better than typical looking prices. People also store magnitude information about prices, remembering approximate figures when they forget the exact price: "We show that prices are encoded in multiple ways and that each form of encoding affects the way prices are remembered."
Marc Vanhuele, Gilles Laurent, Xavier Dreze, and Bobby Calder. "Consumers' Immediate Memory for Prices" Journal of Consumer Research. September 2006.
Journal of Consumer Research