How to Spot a Discount That Isn't One

Retail pricing is designed around a reasonable assumption: that you will do the arithmetic approximately, under time pressure, while holding something you already want.

Most of the techniques aren’t deceptive in any legal sense. They just rely on percentages being slightly counterintuitive, which they are. Here’s what’s actually going on.

Stacked discounts don’t add up

“20% off, plus an extra 20% at the checkout.”

That sounds like 40%. It’s 36%.

The first discount takes £100 to £80. The second takes 20% off £80, not £100 — £16, not £20. You pay £64, having saved 36%.

The gap widens as the numbers grow:

Stacked discounts	Sounds like	Actually is
10% + 10%	20%	19%
20% + 20%	40%	36%
30% + 30%	60%	51%
50% + 20%	70%	60%
30% + 30% + 30%	90%	65.7%

The rule: multiply the fractions you still pay, never add the percentages taken off. Two 30% discounts leave you paying 0.7 × 0.7 = 0.49, so 51% off.

This isn’t a trick — it’s how percentages work, and shops are entitled to advertise both discounts. But “40% off!” is what your brain hears, and 36% is what your card is charged.

“Up to 70% off”

Legally satisfied if one item in the shop is reduced by 70%.

It says nothing whatsoever about the other 4,000 products, the average discount, or the specific thing you came in for. Advertising rules in most jurisdictions require only that the maximum claim be true of some of the stock.

Treat it as a headline that gets you through the door, because that is precisely what it is. The number that matters is the one on the item in your hand.

“Was £120, now £60”

The interesting question is how long it was genuinely £120, and whether anyone bought it at that price.

Many jurisdictions have rules requiring a reference price to have been the actual selling price for a minimum period — the EU’s Omnibus Directive requires the lowest price from the prior 30 days, and the UK has similar guidance. Enforcement is inconsistent, and the rules don’t cover every context.

Signs worth noticing: a “was” price that appears only during sales; permanent sales, where a shop is never not discounting; and reference prices that are round numbers when actual selling prices rarely are.

If a product has been “50% off” for eight months, the discounted price is the price.

BOGOF and 3-for-2

Buy one get one free is a 50% discount, conditional on buying two.

If you were going to buy two anyway, it’s a genuine 50% saving. If you were going to buy one, you have spent the same money and acquired twice as much of something. Whether that’s a saving depends entirely on whether you use the second one before it expires.

3 for 2 is a 33% discount on three items, with the same condition attached.

The honest test: would I have bought this quantity at the unit price? If no, the discount is being used to move stock rather than to save you money.

The bigger pack isn’t always cheaper

Package sizes are chosen to make comparison difficult. 500g at £4.50 versus 750g at £6.30 is not a comparison most people do in an aisle.

Divide each by its size:

• 500g: £4.50 ÷ 500 = £0.0090 per gram
• 750g: £6.30 ÷ 750 = £0.0084 per gram

The larger pack is about 6.7% cheaper per gram. Genuine, if modest.

But sometimes it inverts. Multi-buys and “family size” packs are occasionally more expensive per unit than the standard size, on the assumption that nobody checks. Supermarket shelf labels usually show unit price now, though often in inconsistent units — per 100g on one label, per kg on the next — which quietly defeats the purpose.

And a bulk saving on something perishable is a loss if you throw a third of it away. Six percent cheaper per gram is worth nothing if you bin 30% of it.

Where tax sits

Discounts apply first, tax second. Tax is charged on the reduced price.

A £45 item at 30% off is £31.50. VAT at 20% on that is £6.30, giving £37.80. If tax were charged on the original £45, you’d pay £40.50 — nearly £3 more.

This is normally handled correctly by the till, but it’s worth a glance on a large purchase, and worth knowing if you’re the one writing the invoice.

The mental arithmetic that makes this fast

You rarely need an exact figure in a shop. You need to know quickly whether something is worth it. Build everything from 10%:

• 10% — move the decimal one place left. 10% of £45 is £4.50.
• 20% — double the 10%, or divide by five.
• 25% — divide by four. Usually faster than the percentage route.
• 30% — the 10% figure, three times.
• 33% — divide by three, close enough.
• 50% — halve it.
• 15% — 10% plus half of that again.

The single most useful habit: work out what you pay, not what you save. At 30% off you pay 70%, so 0.7 × £45 is one multiplication instead of two steps. It’s faster and it removes the subtraction error.

Two questions worth asking before the till

Would I buy this at this price if it weren’t discounted?

A 60% saving on something you don’t want is a 100% waste of the remaining 40%. This is the question the entire sale is constructed to stop you asking.

Is this the price, or is it a price?

Some categories — mattresses, sofas, certain electronics — are discounted almost permanently, with a reference price that exists mainly to be crossed out. In those categories the “sale” price is the real price, and waiting for a better one usually works, because there is always another sale.