60% Off When You Take Up To 25% Off The Already Discounted Price!

I'll call the sub-header of this post, "Math Word Problems in Retail."  I have noticed a trend lately.  I first noticed it during the holidays, when I was doing my Christmas shopping.  Retailers are getting very creative in how they word the discount in the sale/clearance section. 

I mean, it was difficult enough on the average american when a $45 sweater was marked $25% off.  Most Americans are awful at doing math in our heads.  So, we either short cut it, "let's see, 25% off of $40 is $10, and 25% off of $5 is $1.25.  So, it's $45 minus $10, which is $35, minus $1.25, which is $34 minus a quarter, which is $33.75."  Hmm... is this sweater worth $33.75?  I dunno, is it closer to being worth it since I have spent all this time calculating the price in my head?  Actually, that method is pretty old school, since most just whip out their cell phones and use the calculator.

But now, they have these two step discounting methods.  The headline of this post is an actual sign that I saw at Macy's recently:

"60% Off When You Take Up To 25% Off the Already Discounted Price!"

And of course, on the actual signage the 60% Off and the 25% Off were about double the font size of everything else.  So, what do our minds do?  We don't bother with the smaller words, and just do some really basic math.  "60% and 25% sounds like 85%.  That's a lot." 

So, there I was, killing time, with no intention to buy anything.  But, heck, if I can get a screaming good deal, maybe I'll buy something.  I see a nice shirt, and pull it off the rack.  It's even my size.  Fortunately, this Macy's has price scanners (don't you wish every store had that?).  The tag on the shirt said $50, and there was a red sticker over the price tag (not over the $50, because they want you to know the original, inflated price) that said $25.  I took it to the price scanner, and it said "$20.00"

What?  I thought it would be less.  Dang it, maybe I should do some math in my head.  Wait a minute, what did that sign say?

"60% Off When You Take Up To 25% Off the Already Discounted Price!"

Aargh!  It says "60% Off" and the rest is just noise.  60% off of $50 is $20.  The $25 sticker and the extra words on the sign are just there for confusion.  It's there to get me to grab a shirt from the rack when I wouldn't normally.  By the time the shirt is in my hands, the likelihood that I am going to buy something just went up a whole bunch.

Heck, the fact that they got me to stop at a rack and even look already increases the odds that I will buy something on some exponential level.

Nothing worse then realizing that you got suckered in by effective marketing or store signage.  In the end, all is well.  I put the shirt back on the discount rack, and left empty handed.  The shirt wasn't worth $20.  And the original tag of $50?  You must be joking.

Comments

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Hey nice info....stores do make a fool by offering discounts when it's already off in their product..

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[Conrad]

I think I have the perfect analogy for this problem: Retailers are full time marketers of their products. You are only a part time shopper. Of course they’re going to win the game and get you to spend more than planned and buy things you don’t need.

I guess the key is to become a full time shopper but that's probably not advisable.

Cheers!

[Sarah]

OMG, Those retailers really made my account negative. I had a Macy's card and a Nordstroms and the apr alone was crazy!
They had great discounts but I'm suffering now. I just applied for another CC to pay of the store cards through a company called the alternative loan machine. I'm nervous about the whole thing. Has anyone had any experience with them?

[jerry]

But what if it leads to 60% off when you take 25% off the already marked price WHICH WAS 90% of the price when converted to British Pounds at an exchange rate of 75% of the average for the past six months (50% of one year)?
Ugh, it makes my head ache to think about it. I wish there was some insurance for just having advertisers say what they mean, instead of being dorks about it.
Jerry

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