How to Calculate Discounts
Calculating discounts is a fundamental shopping skill that helps you understand exactly how much you're saving and whether a deal is actually worth it. This guide covers quick mental math tricks, stacking discounts, and spotting fake sales.
Basic Discount Calculations
Percentage Off
To calculate the sale price: Sale Price = Original Price × (1 - Discount%/100)
Example: 25% off a $80 item = $80 × (1 - 0.25) = $80 × 0.75 = $60
Dollar Amount Off
Simply subtract: Sale Price = Original Price - Discount Amount
Example: $20 off a $80 item = $80 - $20 = $60
To find the equivalent percentage: ($20 ÷ $80) × 100 = 25%
Mental Math Shortcuts
| Discount | Quick Calculation | Example ($80) |
|---|---|---|
| 10% | Move decimal left, subtract | $80 - $8 = $72 |
| 20% | 10% × 2 | ($8 × 2) = $16 off → $64 |
| 25% | Divide by 4, subtract | $80 ÷ 4 = $20 off → $60 |
| 50% | Divide by 2 | $80 ÷ 2 = $40 |
| 15% | 10% + 5% (half of 10%) | $8 + $4 = $12 off → $68 |
| 33% | Divide by 3 | $80 ÷ 3 ≈ $27 off → $53 |
The 10% Trick
Stacking Discounts
When multiple discounts apply, they typically stack sequentially, not additively:
Sequential (Common)
- 20% off + 10% off ≠ 30% off
- $100 → 20% off = $80 → 10% off = $72
- Effective discount: 28% (not 30%)
Why It Matters
Each subsequent discount applies to the already-reduced price, so the total discount is less than the sum of percentages:
| Discounts | Naive Sum | Actual Result |
|---|---|---|
| 20% + 10% | 30% | 28% |
| 25% + 25% | 50% | 43.75% |
| 30% + 20% | 50% | 44% |
| 50% + 50% | 100% | 75% |
Which Discount First?
Is This Sale Real?
Not all "sales" are genuine deals. Here's how to spot fake discounts:
Warning Signs
- Price was raised just before the 'sale'
- Comparison to 'suggested retail price' nobody actually charges
- Permanently 'on sale' items
- Vague comparisons like 'Up to 50% off!'
- Limited inventory at the advertised price
How to Verify
- Use price tracking tools (CamelCamelCamel, Keepa, Google Shopping)
- Check multiple retailers for the same item
- Look at price history charts
- Compare to similar products from other brands
- Wait for major sale events (Black Friday, Prime Day)
Anchoring Effect
Sales Tax on Discounted Items
Sales tax is calculated on the discounted price, not the original:
Example: $100 item, 25% off, 8% tax
Sale price: $75
Tax: $75 × 0.08 = $6
Total: $81
You also save on the tax you would have paid on the full price ($100 × 0.08 = $8 vs $6 = $2 extra saved).
Unit Price: The True Deal Finder
The best way to compare deals is by unit price — the cost per ounce, per item, or per use.
How to Calculate
Unit Price = Total Price ÷ Quantity
| Size | Price | Unit Price |
|---|---|---|
| 12 oz | $4.99 | $0.42/oz |
| 24 oz (10% off) | $7.99 | $0.33/oz ✓ Better! |
| 48 oz | $13.99 | $0.29/oz ✓ Best! |
Look for the Tag
When NOT to Buy
- You weren't planning to buy it before seeing the sale
- You don't need it even at a lower price
- The discount doesn't bring it to your budget threshold
- It's an item that goes on sale frequently (wait for better)
- You'd have to buy more than you can use before it expires
The 24-Hour Rule
Best Times for Sales
| Category | Best Sale Times |
|---|---|
| Electronics | Black Friday, Prime Day, Back-to-School |
| Clothing | End of season, Labor Day, Memorial Day |
| Furniture | Presidents Day, July 4th, Labor Day |
| Appliances | Black Friday, holiday weekends |
| Travel | Shoulder season, Tuesdays (flights) |
| Cars | End of month/quarter/year, model year changeover |
Frequently Asked Questions
Q: Is 'buy one get one 50% off' the same as 25% off?
A: Yes! If you buy two items at full price, getting the second at 50% off means you paid 1.5× for 2 items = 25% off each on average. But only if you actually want/need two.
Q: Should I use a coupon or my store rewards?
A: Usually apply the discount that saves you more money. But check if rewards expire or if they stack. Sometimes you can use both!
Q: Is it better to wait for a bigger discount?
A: Depends on the item. Popular items may sell out. Seasonal items get cheaper over time. Use price tracking to see typical discounts for that product.
Q: Do discounts apply to items already on sale?
A: Policies vary by store. 'Additional X% off sale prices' usually means yes. Regular coupons often exclude sale items. Always check the fine print.
Q: How do 'Up to X% off' sales work?
A: Usually only a few items are actually X% off; most are less. It's a marketing tactic. Look at individual item discounts, not the headline.
Smart Shopping Checklist
- Decide what you need BEFORE looking at sales
- Set a budget for each item you're shopping for
- Check price history to verify the discount is real
- Calculate the final price including tax
- Compare unit prices for bulk or multi-pack options
- Stack coupons and cashback when possible
- Wait 24 hours for non-essential purchases
- Return items promptly if buyer's remorse hits
Prices and discounts vary by retailer. Always verify the final price at checkout. This calculator is for estimation purposes.