Understand this tool
Calculate discounts clearly
- What the concept means
- A discount reduces a marked or reference price by a stated amount or percentage.
- Why it exists
- It separates savings from the sale price so the percentage can be checked against the original price.
- When to use it
- Use it for ordinary percentage discounts and to compare promotions that share the same price basis.
- What the result means—and does not mean
- The result is the price after the entered discount before any unmodeled tax, shipping, fees, coupons, minimum spend, or eligibility rules.
Why successive discounts do not add
A second percentage discount usually applies to the already reduced price, not the original price. A 20% discount followed by 10% therefore leaves 72% of the original price, an effective 28% discount rather than 30%.
Sales tax treatment differs by jurisdiction and promotion. Some systems tax the discounted price, while manufacturer coupons or fees can be handled differently. The checkout total is authoritative.
Key concepts
Key concepts
- List price
- The reference price before the modeled discount.
- Discount rate
- The percentage removed from the relevant price base.
- Sale price
- The price remaining after discount.
- Successive discount
- A later reduction applied after an earlier one.
- Effective discount
- The overall reduction measured against the original price.
Method or process
Calculation method
Why successive discounts do not add
A second percentage discount usually applies to the already reduced price, not the original price. A 20% discount followed by 10% therefore leaves 72% of the original price, an effective 28% discount rather than 30%.
Sales tax treatment differs by jurisdiction and promotion. Some systems tax the discounted price, while manufacturer coupons or fees can be handled differently. The checkout total is authoritative.
Formula or rule
sale price = list price × (1 − discount rate)Compare the concepts
Two discount descriptions
| Offer | Calculation | Effective reduction |
|---|---|---|
| 30% once | 100 × 0.70 | 30% |
| 20%, then 10% | 100 × 0.80 × 0.90 | 28% |
Common mistakes
Common mistakes
- Adding successive percentages directly.
- Applying tax and discount in the wrong order.
- Comparing discounts from different reference prices.
Edge cases and limits
Edge cases and limits
- A 100% discount produces zero before other charges.
- Discounts above 100% or negative prices are usually not meaningful retail inputs.