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Psychologically makes people more likely to buy.
But wouldn’t it be more simple just to add it with the price? Even with items with higher taxes like tobacco products it shouldn’t be that hard.
In foreign countries VAT (value added tax) and service charge is literally on the receipt.
But these days people are too stupid to take the receipt.
Initially I wanted to get rid of some of the equally stupid and customer-unfriendly small change (the largest common coin is a quarter?!?) by paying the exact price at the cashier, like I would do that in Europe. There, if I bought a single item worth 1.95, I simply could get rid of change by paying the exact amount. Couldn't do that in the US without blocking all the people beind me, since I did not know, that that ♥♥♥♥♥♥♥ Snickers would actually cost me in the end without going online and finding out about the tax of the state I was currently in.
What an extremely stupid system.
I don't care what the government charges. I only care what I have to pay in the end. I don't want to do the shop owners tax returns.
I could do the math, but why should I? Because the shop can't do the math? Are American shops owners stoopid?
I can tell you about "other countries". The price you pay is the price on the price tag. It is really, really, really simple.