Not so great of a discount

A few weekends ago my brother was visiting and we were at the mall. We had walked by an earring kiosk and Amie stopped to look. Looking above the kiosk, there was a sign.  I said:

$25 off your next purchase of $50 or more

when you purchase $50 or more

Of course, the marketing folks don’t want you to read the fine print. The just expect you to read the first line and think you can get a 50% discount.  That’s pretty good on jewelry, right?  Well, not really.  Jewelry has such a high markup.  You know how they constantly have 70% off sales?  They’re still raking in the dough.  Buying something at full price and you’re paying way more.

Anyways, back to the issue at point. So let’s figure out how much the discount really is. Well, at this place, everything costs $24.99. Which to the average person is basically $25. Of course, purchasing two items isn’t going to put you at $50, but rather $49.98. So for this initial purchase, you’ll need to buy just one more item.  Of course, the salesperson will present it as “Spend an extra $25 now and you’ll get a $25 coupon.”  Of course, that translates to free for the people who fail at basic accounting. So we’ve now spent $75 (or $74.97 if you want to be pedantic). And we have a to spend another $74.97 on our next visit (which must occur within 30 days!).  But we get our $25 discount, so we really just spend $50.  So overall, we’ve saved $25 out of $150 “worth” of items, or 16.7%. Far cry from the initial thought of 50%.

We discussed other discounts too. Punch cards are a rip-off sometimes.  Yes, if you go to the place anyways, get the punch card and get your free meal.  But some places have it just be ridiculous, like buy 12 get 1 free.   That basically just translates to a 7.7% discount for being a loyal customer. And that’s assuming you remember the card every time and don’t lose it. Like my brother said, they’re basically paying you a very small fee to carry around a small billboard in your wallet for them.

Another one I see is a “Get 10 punches, save $5 on your next purchase” where a punch is given for each $10 is spent. In a perfect world, you’d get exactly 10 $10 purchases.  This would give you a 5% discount if you play your cards perfect (actually, 4.76% because you’d be getting $105 worth of merchandise for $100).  But some of these purchases are going to be $15, or $17, or the worse, $19.99.  So in the worse-case scenario, this could be a 2.5% discount.  5% isn’t that big.  Imagine if you shopped elsewhere and found a $25 item for 20% cheaper.  That’s your savings right there.  But the punch cards makes you not want to go elsewhere.

Amie said an even worse one she’s seen is spend $250 get 10% off your next purchase. This is at a place with relatively small transactions, so your next purchase might be $20.  So you’ve “saved” $2 by spending $250…..woohoo!

What “bad” customer appreciation deals have you seen?

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Bryan Logan

About Bryan Logan

I'm Bryan. I like to innovate things. These innovations may materialize as activities with the kids, new/easier/better ways of doing things, smartphone apps, or just funny blog posts. You can find me on Twitter and
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  • Ricky Anderson

    I knew I’d regret not passing those math classes!

  • http://www.logan.cc/blog/ Bryan

    If they had these as the word problems, maybe the housing debt crisis would’ve never happened.

    Logan 2016