This study investigated the effect of cost–benefit salience on simulated criminal punishment judgments. In two vignette‐based survey experiments, we sought to identify how the salience of decision costs influences laypeople's punishment judgments. In both experiments (N1 = 109; N2 = 398), undergraduate participants made sentencing judgments with and without explicit information about the direct, material costs of incarceration. Using a within‐subjects design, Experiment 1 revealed that increasing the salience of incarceration costs mitigated punishments. However, when costs were not made salient, punishments were no lower than those made when the costs were externalized (i.e., paid by a third party). Experiment 2 showed the same pattern using a between‐subjects design. We conclude that, when laypeople formulate sentencing attitudes without exposure to the costs of the punishment, they are prone to discount those costs, behaving as if punishment is societally cost‐free. However, when cost information is salient, they utilize it, suggesting the operation of a genuine, albeit labile, punishment preference. We discuss the implications of these findings for psychological theories of decision making and for sentencing policy, including the degree of transparency about the relevant costs of incarceration during the decision process.