Discounts and Coupons: The Real Price After the Markdown

Order matters when you stack

A $100 item with 20 percent off and a $10 coupon lands at $70 if the percent applies first, then the coupon — but at $72 if the coupon applies first. Most stores apply percent first, coupon second, then tax. The calculator follows that order and shows each step so the final number is not a mystery.

Percent off is relative, dollars off is absolute

50 percent off a $20 item saves $10; 20 percent off a $500 item saves $100. The badge size does not tell you the saving. Convert every offer to dollars saved per item or per cart before comparing deals, especially when a store advertises the discount on the most expensive item in the basket.

Tax changes the comparison

Sales tax applies to the discounted price, not the original. A $100 item at 20 percent off with 8 percent tax costs $86.40 — not $80 plus tax on $100. When comparing an online price with tax included against a local price without, put both on the same tax basis first.

The 'markup then discount' trap

A retailer can raise a price before a sale, so the 'discount' returns the item to its normal price. Check the price history or compare against other sellers before treating a badge as a deal. The calculator tells you what the math is; it cannot tell you whether the starting price was real.

Worked example

A $120 jacket at 25 percent off with a $15 loyalty coupon and 7 percent tax: $120 minus 25 percent is $90, minus $15 is $75, plus 7 percent tax is $80.25. The calculator produces the same path in one screen, so the final price is defensible before you reach the register.

Sources and further reading

• Federal Trade Commission — Shopping tips
• Wikipedia — Discounts and allowances