Discounts – what are they? How do discounts work?

Discounts: who doesn’t like them? They encourage customers to buy larger quantities of their regular purchases in a single go, as well as to try new products that aren’t particularly appealing at the standard price. Although a discount represents a reduction in the original price, it usually results in increased profits for the retailer. Find out how discounts work and when it’s worth taking advantage of them.

A rebate and a discount – are they the same thing?

Discount, reduction, price cut – these terms are usually used interchangeably. However, this is only correct in the case of a price reduction. There are, in fact, various types of discounts, including a free-goods discount, where the seller provides additional products free of charge. This is the basis for promotions such as ‘2+1’ or ‘two for the price of one’. In B2B, discounts often take the form of individually negotiated reductions for regular customers or for larger order volumes.

We most often come across fixed-amount or percentage discounts. In the first case, the price of the product is reduced by a specific amount. However, retailers usually opt for a percentage discount, as this appears more favourable to customers. For example, you’re more likely to choose an item labelled ‘-10%’ rather than ‘-1 zł’, even though the price of the product after the discount will be the same.

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How to calculate the discount amount – possible scenarios

How do you calculate a percentage or fixed-amount discount? These days, most shops display the price after the discount has been applied. The previous price is crossed out, which further catches the eye of potential buyers. If the retailer has not stated the reduced price of the goods, you can easily work out the cost yourself.

Discount vouchers offering fixed-amount discounts at various shops are still widely used. In their case, all you need to do is subtract the discount from the original price. Sometimes it is possible to pay for products using vouchers.

How do you calculate a percentage discount? You need to multiply the price of the item by the discount percentage. This will give you the amount to be deducted from the original price. Once you’ve deducted this, you’ll know how much you’ll save on the purchase.

Discount – the most common form of price reduction in discount stores

Discounts are the hallmark of discount stores. That’s why it’s hard to pop in just for one item – especially if there’s a ‘buy two, get one free’ offer. However, be careful – this type of discount often applies to goods with a short use-by date. At the same time, both in high-street shops and online, taking advantage of discounts sometimes requires meeting certain conditions, such as holding a loyalty card, which acts as a kind of promotional voucher.

Online shops and mobile apps often offer discount codes for new customers. These can only be used when placing your first order or after signing up for the newsletter. It’s worth keeping an eye on websites that regularly publish promotional codes for use in various shops. By combining several promotions, you can get some really big discounts.

Sometimes, promotional codes are also published by influencers who have partnered with the retailer. If a customer uses a unique code, a fraction of the value of the product sold goes into the influencer’s pocket. In each of the above cases, the trader is obliged to include information about the discount applied on the receipt or invoice.