It is believed to have started long before electric cash registers. It is commonly believed that it started as a way for merchants to force their employees into ringing up the sales in the cash register and prevent the employee from making change from their pocket.

Then the marketing people came along and realized that people tend to "round down"; thus 99.99 became 99, not 100. And it stuck.

Exactly that, to trick your brain into thinking it's a dollar lower in price at first glance when really it's only a penny less. It's called psychological pricing, consumers tend to perceive “odd prices” as being significantly lower than they actually are, tending to round to the next lowest monetary unit. Prices such as $1.99 is associated with spending $1 rather than $2. Some people think it works others don't, I don't think anyone is stupid if they fall for this though. When you're in a hurry shopping around for groceries or something you tend to glance at prices and make quick decisions based on how much you know your budget is, it's easy to forget and easy to feel like you're spending less.

But when you think about it yeah it's just a mere penny less.

Did you ever check the actual price for a gallon of gasoline?

$3.499.

Something for 10 bucks? Make it $9,99! I know that i'm supposed to feel that i'm getting it for a dollar cheaper but really who's stupid enough to fall for this? Well thanks for the extra penny I get to keep anyway.