The idea of applying a fixed price to a product is a recent development in the world of commerce. For most of human history, customers would normally haggle on the price of an item before they purchased it.
For a long time, haggling the price of a product was part of the routine when making purchases. Because of this, clerks and shop owners had to be trained in the art of negotiating with customers to determine the value of a transaction.
So What Changed?
The system of haggling was accepted by everyone except for the Quakers and in the middle of the 19th century, Quakers changed history with one simple change by applying fixed prices to their products. They believed that charging different prices to different people was unfair and immoral; as all men are equal before God, all men should receive the same price. They were also aware of the inefficiencies of haggling and fixing the price, also made good business sense.
As stores became larger, it became more difficult and costly to manage and train clerks to negotiate the price of products within stores and a hassle for customers. By applying fixed prices, clerks and store owners would no longer need to know how much was paid for the items being sold or how much their competitors were selling it for, while also making sure they don’t lose money during the price negotiation with customers.
John Wanamaker, a Presbyterian storekeeper in Philadelphia gets credit for the invention of the price tag. Owning stores in several cities including New York, John Wanamaker added prominently displayed price tags on his products in his Philadelphia store in 1861, stating that:
My price is the same for any man, be he a pauper or a King
The fixing of prices and the use of price tags were important innovations in retail and commerce, paving the way for increased competition and an easier life for both clerks and customers.
