
The man was buying single
numbers; each number cost £1.20. He had to compose number 100, so he
bought one single number 1 and two 0's. Thus he had to pay for the
three single numbers 3 x £1.20 = £3.60.
There are a lot of real things he could buy (most of them are from
your answers):
 Numbers for his house;
 Birthday candles in shape of digits;
 Numbers for his letter box;
 Numbers for his front door;
 Diecast numerals;
 Number for his outside address plate;
 Digits for a sign.
We've got a solution that says the man was buying Bits at 1.20 Pounds
per Bit. 10 is binary 2, i.e. 2.40 pounds and 100 is binary 3, i.e.
3.60 pounds.
It's an unusual solution, but mathematically correct. Something like
"When 2x2=11?" what is about a simple task but in a nondecimal
numeration*. (!)
Also we've got some "possible" but not very logic answers, which not
use the puzzling effect at all.

*After the Contest's finish and publishing of the Bits' solution
described above, we've received a number of messages from our visitors
pointing out there is a mistake in the Bits' solution. We are sorry
for this mistake (though the solution with Bits sounds very intriguing
and it is almost true). We provide the respective comments on this
form our very attentive visitors and solvers below.
From Mark Stieffenhofer:
1 decimal = 1 binary
2 decimal = 10 binary
3 decimal = 11 binary
So that solution won't work after all.
Besides that, great site!
From Rick Borchert:
I'm afraid this is wrong. I also considered bits, but binary 3 is 11,
100 in binary is 4
From David G. MacLean:
While binary 1 = decimal 1 and binary 10 = decimal 2, binary 100 =
decimal 4, not 3.
Let's stay with the purchase of numerals, okay?
We thank you all for this improvement!! 
