The Problem With “Was $200, Now $99”
A sign says an item was $200 and is now $99 — a 50.5% saving. But if the item was only ever sold at $200 for three days before the sale, and has been at $99 ever since, is that really a discount?
Regulators in the US, UK, EU and Australia have rules about this. But the rules are complex, enforcement is inconsistent, and some tactics are entirely legal while still being misleading.
Here is what to watch for.
Tactic 1: Inflated Reference Prices
How it works: The retailer briefly offers the item at a high “original” price — sometimes for as little as one day — then runs a perpetual “sale” against that reference price.
The math: If a $60 item is “marked down” from a $100 reference price that barely existed, the real discount is zero. You are paying the actual market price.
How to spot it: Search for the item on price comparison sites. If the current “sale” price matches or exceeds competitors’ regular prices, the discount is cosmetic.
Tactic 2: The Anchor Price Illusion
How it works: Placing an expensive item next to what you want to sell makes the target item look cheap by comparison.
A $300 handbag placed next to a $900 handbag feels like a bargain — even though the $300 price has nothing to do with a discount.
The math: There is no discount here at all. The “reference” is just a neighbouring product.
How to spot it: Evaluate the item on its own merits and price, not relative to adjacent products.
Tactic 3: Misleading Percentage Claims
How it works: “Up to 70% off” in large text, with one obscure item discounted 70% and most items at 10–15% off.
The math: “Up to X%” tells you the ceiling of one item, not the typical saving. The average saving may be far lower.
How to spot it: Calculate the discount on the specific item you want, not the advertised headline figure.
Actual discount % = ((Original − Sale) / Original) × 100Tactic 4: Stacked Discounts That Don’t Stack
How it works: “30% off, plus an extra 20% at checkout” sounds like 50% off. It is actually 44% off.
1 − (1 − 0.30) × (1 − 0.20) = 1 − 0.56 = 44%The math: Discounts compound, they do not add. See our guide to stacking discounts for the full formula.
How to spot it: Always calculate the final price rather than adding percentages together.
Tactic 5: Bundle Discounts That Obscure Individual Prices
How it works: “Buy 3 for $30” when the individual price is $12 each — so you would spend $36 for three. That is a 16.7% saving, not the implied “great deal” the presentation suggests.
The math:
Saving = 1 − (Bundle price / (Individual price × Quantity))
= 1 − (30 / 36) = 16.7%How to spot it: Divide the bundle price by the quantity and compare to the individual price.
How to Protect Yourself
- Calculate the actual discount using the formula above — do not rely on the retailer’s stated percentage.
- Check the price history using browser extensions or price tracking sites.
- Compare to competitors before assuming the “sale” price is competitive.
- Read the fine print on “up to X% off” promotions.
- Use our discount calculator to verify what you’re actually saving before you buy.
The mathematics of discounts are simple. The marketing around them is not.