Discount Calculator

The anchor price problem

A discount is a comparison, and the comparison is only meaningful if the original price was real. This is exactly why regulators in many countries have rules requiring that a 'was' price must have been genuinely charged for a meaningful period before a sale can reference it — and why enforcement actions against retailers for fictitious reference pricing are a regular occurrence. The psychology is well documented: an anchor price shifts your perception of what is reasonable before you have consciously evaluated anything, and a large percentage-off figure does more work on your judgement than the actual price does. The only reliable defence is to ignore the discount entirely and ask a simpler question — is this final price good, compared with what other sellers are charging right now?

Why stacked discounts disappoint

Successive discounts compose multiplicatively, and human intuition insists on adding them. Take 50% off 200 and you are at 100. Take a further 20% off, and that 20% is now taken from 100, not from 200 — so you save 20, not 40, and land at 80. The total discount is 60%, not the 70% your instinct promised. The gap widens as the discounts get larger, and retailers who advertise 'an extra 20% off sale prices' are relying on it. The arithmetic is easy once you frame it as what you pay rather than what you save: you pay 50% and then 80% of that, and 0.5 × 0.8 is 0.4 — you pay 40% of the original.