Calculating a sale price
Multiply the original price by one minus the discount as a decimal. A $120 item at 30% off is 120 × 0.70 = $84. The equivalent approach — calculating 30% of 120 to get $36 and subtracting — gives the same answer, but the single multiplication is faster and less error-prone.
To reverse the calculation and find an original price from a sale price, divide instead. An item selling for $84 after 30% off was originally 84 ÷ 0.70 = $120.
| Original | 10% off | 20% off | 25% off | 30% off | 40% off | 50% off |
|---|---|---|---|---|---|---|
| $25.00 | $22.50 | $20.00 | $18.75 | $17.50 | $15.00 | $12.50 |
| $40.00 | $36.00 | $32.00 | $30.00 | $28.00 | $24.00 | $20.00 |
| $60.00 | $54.00 | $48.00 | $45.00 | $42.00 | $36.00 | $30.00 |
| $80.00 | $72.00 | $64.00 | $60.00 | $56.00 | $48.00 | $40.00 |
| $100.00 | $90.00 | $80.00 | $75.00 | $70.00 | $60.00 | $50.00 |
| $150.00 | $135.00 | $120.00 | $112.50 | $105.00 | $90.00 | $75.00 |
| $200.00 | $180.00 | $160.00 | $150.00 | $140.00 | $120.00 | $100.00 |
Stacked discounts multiply, they do not add
This is the most valuable thing to understand about discounts. Taking 30% off and then an extra 20% off does not give 50% off. Each discount applies to the running price: $120 × 0.70 = $84, then $84 × 0.80 = $67.20. That is an effective discount of 44%, not 50%.
The gap widens as discounts grow. Stacking 50% and 50% gives 75% off, not 100% — the second half-off applies to what remains. Retailers rely on the intuition that percentages add, which makes 'extra 20% off sale prices' sound better than it is. Working the actual number is usually worth the ten seconds.
| Discounts | Sounds like | Actual discount | You pay |
|---|---|---|---|
| 10% then 10% | 20% | 19% | $81.00 |
| 20% then 10% | 30% | 28% | $72.00 |
| 20% then 20% | 40% | 36% | $64.00 |
| 30% then 20% | 50% | 44% | $56.00 |
| 40% then 25% | 65% | 55% | $45.00 |
| 50% then 20% | 70% | 60% | $40.00 |
| 50% then 50% | 100% | 75% | $25.00 |
Comparing offer types
Offers framed differently are often easier to compare once converted to a percentage. Buy-one-get-one-free is 50% off when you want two items and no discount at all when you want one. Buy-two-get-one-free is 33.3% off across three items. A $20-off-$100 coupon is 20% at exactly $100 and less on anything larger, so its value falls as the basket grows.
Watch for conditions that erode the value: minimum spends that push you to buy more than intended, exclusions on the items you actually want, and inflated reference prices where the 'original' figure was never a real selling price. In the US, comparing to a fictitious former price is prohibited by FTC guidance, though enforcement is limited.
| Offer | Effective discount | Condition | Notes |
|---|---|---|---|
| 50% off | 50% | Any quantity | The clean benchmark |
| Buy one, get one free | 50% | Only if you want two | 0% if you wanted one |
| Buy one, get one half price | 25% | Across the pair | Often shown as '50% off' |
| Buy two, get one free | 33.3% | Across three | Requires three items |
| Buy three, get the fourth free | 25% | Across four | |
| $20 off $100 | 20% | At exactly $100 | Falls to 10% at a $200 basket |
| Free shipping | Value of shipping | Depends on order size | Typically 5 – 15% on small orders |
Where sales tax fits
Sales tax is calculated on the discounted price, not the original, so a discount reduces the tax you pay as well. A $120 item at 30% off in an 8% tax jurisdiction costs 84 × 1.08 = $90.72 — you save both the $36 discount and $2.88 in tax.
Manufacturer coupons are the exception in some states, where tax is charged on the pre-coupon price because the retailer is reimbursed for the difference. Store discounts reduce the taxable amount, but manufacturer coupons may not.
Working back to the original price
Divide the sale price by one minus the discount. This is the calculation to check whether the 'was' price on a tag is plausible, and to work out what you actually saved.
| Sale price | Discount | Original price | Saved |
|---|---|---|---|
| $60.00 | 25% | $80.00 | $20.00 |
| $84.00 | 30% | $120.00 | $36.00 |
| $45.00 | 10% | $50.00 | $5.00 |
| $120.00 | 40% | $200.00 | $80.00 |
| $99.00 | 33% | $147.76 | $48.76 |