Shopping often involves discount and sale price. But having a good number sense will make you a better consumer. In this article we will examine and compare common sales offers used in retail stores.
Buy 1, Get 1 Free. In this world, nothing is free. The best way to compute the cost per item is to take the price for one item, and divide by two. Then you can determine if this is a good price. For example, if the price for one is $19.99, then the cost per item is roughly $20 divided by 2, or $10 each.
Buy 2, Get the Third free. The best way to compute the cost per item is to take the price for two items, and divide by three. Then you can decide if this is a good price. For example, if the price for one is $7.49, then the cost per item is roughly $15 divided by 3, or $5 each.
Buy 1, Get One 1/2 Price. If the price for one is $19.99, then the cost per item is approximately the sum of $20 and $10, divided by 2, which is $15.
Buy 1, Get the Second for $1. If the price for one is $19.99, then the cost per item is about $21 divided by 2, or $10.50.
For each of the offers above, we computed the actual cost per item. Once you know the actual cost, you can determine if an offer is a good, and the true value it presents.
Another common technique for boosting retail sales is through coupon offers. If there is more than one coupon, things can get confusing. For our first example, suppose the same store offers you these coupons:
- 20% off any purchase
- $10 off your purchase of $30 or more
Which coupon would you choose and why? The answer depends on how much you buy from the store. The first coupon is a discount rate of 20% -- the discount will vary in direct proportion to the amount of your purchase. The second coupon is a fixed amount off a minimum buy. Let's compare these coupons for several purchase amounts to see which one saves you more.
Ex. 1 | How Much Will You Save? | |
purchase | 20% off | $10 off $30 or more |
$20 | $4 | $0 |
$25 | $5 | $0 |
$30 | $6 | $10 |
$35 | $7 | $10 |
$40 | $8 | $10 |
$45 | $9 | $10 |
$50 | $10 | $10 |
$55 | $11 | $10 |
$60 | $12 | $10 |
In example 1, the break-even point is a purchase of $50. For our second example, suppose the same store offers you these coupons:
- $25 off your purchase of $100 or more
Once again, which coupon you choose depends on how much you buy. Let's compare these coupons for several purchase amounts to see which one saves you more.
Ex. 2 | How Much Money Will You Save? | |
purchase | 20% off | $25 off $100 or more |
$25 | $5 | $0 |
$50 | $10 | $0 |
$75 | $15 | $0 |
$100 | $20 | $25 |
$125 | $25 | $25 |
$150 | $30 | $25 |
$175 | $35 | $25 |
$200 | $40 | $25 |
In example 2, the break-even point is a purchase of $125.
In the problems above, we computed the amount saved for each coupon (i.e., the discount). To compute the sale price (the amount you actually pay), you would have to subtract the discount from your purchase amount. If you only have a certain amount of money to spend, then sometimes it is easier to compute the sale price directly. To do this, take the discount rate and subtract it from 100%, then multiply the result by your purchase amount. In the case of 20% off, you would multiply your purchase amount by 80% to get the amount you will actually pay. This is shown in example 3 below.
Ex. 3 | How Much Money Will You Pay? | |
purchase | 20% off | $10 off $30 or more |
$20 | $16 | $20 |
$25 | $20 | $25 |
$30 | $24 | $20 |
$35 | $28 | $25 |
$40 | $32 | $30 |
$45 | $36 | $35 |
$50 | $40 | $40 |
$55 | $44 | $45 |
$60 | $48 | $50 |
In example 3, the break-even point is a purchase of $50.
The information above might be common sense for some readers, and an eye-opener for others. From my experience, people vary widely when it comes to number sense and shopping habits. In any event, it is good to be able to catch a cashier's errors when making a purchase.
This article is by Gisele Glosser. You can find me on Google.