How discounts actually work and why stacking them is not what you think
A discount is a reduction from the original price. The three most common questions are: what is the final price after a known % off, what % off was applied given two prices, and what % does a fixed saving represent. Each has a formula.
Percentage discount
Formula: Savings = Original x (Discount% / 100) and Final price = Original - Savings
Examples:
- 25% off 3,200: savings = 3,200 x 0.25 = 800, final price 2,400
- 15% off 499: savings = 74.85, final price 424.15
The savings bar in this tool fills proportionally. A 25% discount fills 25% of the bar in green, so you immediately see how significant the saving is.
Finding the discount percentage from two prices
Formula: Discount% = ((Original - Final) / Original) x 100
This is useful when a store shows "was 1,800, now 1,350" without stating the percentage.
- Saving = 1,800 - 1,350 = 450
- Discount% = (450 / 1,800) x 100 = 25%
Always divide by the original price, not the final price. Dividing by the final gives a different (larger) figure, a common mistake in vendor claims.
Stacked discounts: why 20% + 10% does not equal 30%
Stacked discounts apply one after another, not on the original price together.
- 20% off 1,000 gives 800
- 10% off 800 gives 720 (not 700)
- Total saving: 280, which is 28% off the original, not 30%
The formula for two stacked discounts: Total% off = 100 - (100 - d1) x (100 - d2) / 100
For 20% and 10%: 100 - (80 x 90 / 100) = 100 - 72 = 28%
This is why "extra 10% off already discounted items" is always less impressive than it sounds.
List price vs sale price
Many retailers show a "list price" or "recommended retail price" alongside the sale price. The discount is calculated against this listed original price. Be cautious when discounts are claimed against an inflated "original" price that was never actually charged. A genuine discount should reference a price the item was consistently sold at.