The goal of that type of price display is to encourage the user to ignore the cents on an item. They see the '12', but kind of ignore the '96', which leads to shoppers unconsciously lowering the cost of the item by a dollar; mentally rounding the price down to $12, not up to $13. As a retailer this is certainly an attractive prospect, especially for many low cost items ($295 looks a lot like $2, much cheaper than $3).
So the question is not really 'is there a usability issue', because there obviously is. The user will incorrectly estimate the cost of items. The real question is 'will this annoy the user enough to leave', and to be honest that depends on the rest of the site far more than a single price display.
However, I can point you to the usability issues inherent in small text. The older our population gets, the more impaired their vision; while you may want to de-emphasize the cents, you certainly don't want it to be illegible. This is what will happen however for a significant chunk of users if the cents drops below about 10pt in size. If they can't read the cents portion at all I would not be surprised if it drove away some users.