Discounts, and the ones that are smaller than they look
Why stacked offers multiply rather than add, how buy-one-get-one converts to a percentage, and the arithmetic behind an inflated original price.
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In short
- Stacked discounts multiply. 30% off then a further 20% is 44% off, not 50%.
- Buy one get one free is 50% off. Buy two get one free is 33.3%. Buy three get one free is 25%.
- Working back from a sale price is a division. ₹800 after 20% off was ₹1,000, not ₹960.
- A discount comes entirely out of profit, so a 10% discount on a 33% margin removes 30% of the profit.
- "Up to 70% off" is a claim about the single deepest item in the shop, and often about one of them.
A discount is a percentage taken off a price. The arithmetic is simple and the ways it is presented are not, which is where most of the value of doing the sum yourself comes from.
sale price = original × (1 − discount)
30% off ₹2,000 is 2,000 × 0.70 = ₹1,400.
Stacked discounts multiply
"30% off, and an extra 20% at the till" is not 50% off.
The second discount applies to the already-reduced price:
2,000 → 30% off → 1,400 → 20% off 1,400 → ₹1,120
That is 44% off the original. The rule is to multiply the remaining fractions: 0.70 × 0.80 = 0.56, so 44% comes off.
| Stacked offer | Sounds like | Actually |
|---|---|---|
| 10% + 10% | 20% | 19% |
| 20% + 10% | 30% | 28% |
| 30% + 20% | 50% | 44% |
| 50% + 20% | 70% | 60% |
| 50% + 30% | 80% | 65% |
| 50% + 50% | 100% | 75% |
The last row is the clearest demonstration: two 50% discounts never make anything free.
Order does not matter — 30% then 20% gives the same result as 20% then 30% — which is worth knowing when a cashier applies coupons in a particular sequence and claims it matters.
Reversing a discount is a division
An item costs ₹800 after 20% off. What was the original?
The instinct is to add 20% back: 800 × 1.2 = ₹960. That is wrong.
₹800 is 80% of the original, so:
original = 800 ÷ 0.8 = ₹1,000
Check it: 20% of 1,000 is 200, and 1,000 − 200 = 800. Adding 20% to 800 gives 960, and 20% off 960 is 768, not 800.
Apply a discount: multiply. Reverse one: divide. The same rule governs removing tax from an inclusive price, which is the identical problem.
Converting the other offers
Buy one get one free. Two items for the price of one is 50% off, provided you wanted two.
Buy two get one free. Three for the price of two: 1 − 2/3 = 33.3%.
Buy three get one free. Four for the price of three: 25%.
| Offer | Discount |
|---|---|
| Buy 1 get 1 free | 50.0% |
| Buy 2 get 1 free | 33.3% |
| Buy 3 get 1 free | 25.0% |
| Buy 2 get 1 at half price | 16.7% |
| Second item half price | 25.0% |
The qualifier matters more than the arithmetic. A 50% discount that requires buying two of something you wanted one of is a 0% discount and a 100% increase in spending. Multi-buy offers on perishables are the clearest case: half price on something that spoils before you use it is not half price.
Cashback is generally a smaller discount than the equivalent percentage off, because it arrives later, often as store credit, and frequently has a cap. ₹100 cashback on ₹1,000 is 10% only if the ₹100 is money you would have spent anyway.
No-cost EMI carries the interest somewhere — usually in a price that is not discounted, or in a processing fee. The comparison is against the cash price of the same item elsewhere, not against the same shop's own EMI price.
What a discount costs the seller
A discount comes entirely out of profit, which is why its effect is disproportionate.
On an item costing ₹100 and priced at ₹150 — a 33.3% margin:
| Discount | Price | Profit | Profit lost |
|---|---|---|---|
| 0% | ₹150 | ₹50 | — |
| 10% | ₹135 | ₹35 | 30% |
| 20% | ₹120 | ₹20 | 60% |
| 30% | ₹105 | ₹5 | 90% |
| 33% | ₹100 | ₹0 | 100% |
A 10% discount removes 30% of the profit. To make the same total profit afterwards, you would need to sell 43% more units.
This is worth knowing on both sides of the counter. For a buyer, it explains why the deepest discounts appear on the highest-margin categories — apparel and jewellery discount heavily because they can, and electronics cannot. For a seller, it is the reason a discount is a decision about volume rather than a marketing gesture.
MRP, and the inflated original
In India, the maximum retail price is a legal maximum printed on packaged goods, inclusive of all taxes. Selling above it is an offence.
Because it is set by the manufacturer, it can be set high. A perpetual "40% off MRP" on a product that has never sold at MRP is a discount from a number rather than from a price, and it is legal.
The related pattern online is a struck-through "original" price that the item was offered at only briefly, or never. India's consumer protection rules treat misleading price comparisons as an unfair trade practice, and enforcement is patchy.
The practical defence is to ignore the discount percentage and compare the final price across sellers. A 60% discount to ₹1,200 is worse than a 10% discount to ₹1,050, and only the second number in each pair is a fact.
Where the calculation actually helps
Comparing across shops. Two offers with different structures — one 35% off, one buy-two-get-one — resolve to comparable numbers once converted.
Checking the till. Stacked offers are applied wrongly often enough to be worth a mental check, particularly where a coupon interacts with a sale price.
Deciding whether to wait. Knowing the usual discount depth for a category tells you whether an offer is unusual. Apparel reaching 50% mid-season will usually reach 70% at the end of it.
Not being anchored. The percentage is designed to be the salient number. The final price and whether you wanted the item are the two that determine whether the purchase was good, and neither appears in the offer.
When the discount is on the wrong thing
The percentage is arithmetic; whether it is a good purchase is not, and the two get conflated by design.
Would you buy it at the sale price if there were no discount? If the answer is no, the discount saved nothing and cost the sale price. This is the only question that reliably separates a saving from a purchase.
Is the comparison price real? A discount from an inflated reference price is a discount from a number. Compare final prices across sellers instead.
Does the offer require more than you need? Multi-buy discounts on perishables and on anything with a shelf life are frequently negative in practice.
What does the total come to? Retailers price the discount to be salient and the total to be secondary. Reversing that ordering is most of the defence.
Anchoring is the mechanism, and it works on people who know about it. A struck-through ₹4,000 makes ₹2,400 feel like a saving of ₹1,600 rather than a spend of ₹2,400, and the effect survives being aware of it. Deciding what you are willing to pay before seeing the offer is the only reliable counter.
Sale cycles worth knowing
Discounts in Indian retail follow a fairly predictable calendar, which makes waiting a real option for anything not needed immediately.
Apparel discounts twice a year at season end, reaching 50% early and 60% to 70% in the final weeks, at which point size availability has collapsed. Electronics discount hardest during the festive sales in late September and October, and again in January. New phone models drop the previous generation's price within weeks of launch.
Against that, groceries, fresh food and anything in short supply do not follow a cycle, and a discount on them is worth taking when it appears.
The general rule: the deeper and more regular the discount cycle, the higher the margin in the category, and the less urgency there is about any individual offer.
What this calculator assumes
- The original price you enter is the actual price, not the MRP or a struck-through reference figure.
- Stacked discounts are applied sequentially, each to the running price, which is standard retail practice.
- Prices are treated as inclusive of tax, matching Indian MRP convention. Where tax is added afterwards, apply the discount first.
- Multi-buy offers assume you want every unit in the offer; the effective discount is lower if you do not.
- Rounding is applied to the final figures rather than at each step.