Question 1

What is the exact formula the Discount Calculator uses?

Accepted Answer

Sale price = Original price × (1 − discount%/100). Savings = Original price − Sale price. Example: a $180 item at 30% off becomes $180 × (1 − 0.30) = $126 with $54 saved. When a store lists a percentage-off coupon, the coupon typically applies to the item's current price (pre-tax); the calculator matches that convention and reports the pre-tax sale price so you can add sales tax separately.

Question 2

Do stacked discounts (say 40% off then 20% off) equal 60% off?

Accepted Answer

No. Sequential discounts multiply, they do not add. A 40% discount followed by a 20% discount is (1 − 0.40) × (1 − 0.20) = 0.48, i.e. 52% off the original price, not 60%. This applies whenever a coupon takes an additional percentage off the already-marked-down sale price. Order does not matter for percentage-off percentages, but a dollar-off coupon combined with a percentage-off coupon does depend on which is applied first (retailer policy governs; check the receipt).

Question 3

Is sales tax added before or after the discount?

Accepted Answer

Every U.S. state that taxes retail sales applies sales tax to the post-discount price when the discount is a store-issued markdown or a manufacturer's coupon that reduces the seller's receipts. For example, the California Department of Tax and Fee Administration's Publication 113 (Coupons, Discounts, and Rebates) treats store coupons as reductions in taxable receipts, while manufacturer coupons (where the seller is reimbursed by the manufacturer) are taxed on the pre-discount price. Rules mirror this in New York, Texas, and Illinois. Rebates that arrive after purchase generally do not reduce sales tax.

Question 4

How do retailers set the "original" or "list" price a discount is calculated from?

Accepted Answer

In the U.S., the FTC's Guides Against Deceptive Pricing at 16 CFR Part 233 require the reference price to be a bona fide former or prevailing price, not a fictitious “regular” price used solely to inflate the discount claim. The European Union's Omnibus Directive 2019/2161 (in force 2022) goes further: any advertised price reduction must reference the lowest price the seller charged in the prior 30 days. Consumer-protection agencies in California (Business & Professions Code §17501) and New York (GBL §396-ee) prohibit false original-price claims. When the calculator's “original price” input is wrong, the “you saved” output is meaningless.

Question 5

How should I compare stacked promotions like coupons, rebates, and BOGO offers?

Accepted Answer

Reduce every promotion to a single effective unit price. BOGO (buy-one-get-one-free) on identical $50 items is $25 per unit (50% off). BOGO 50%-off is $37.50 per unit (25% off). A $10 mail-in rebate on a $60 item is 16.7% off if you actually redeem it (Consumer Reports and the FTC repeatedly note rebate redemption rates below 50%). Loyalty points denominated in cents per point (e.g., 2% back) reduce effective cost only when you value the redemption at face; airline miles frequently underperform their nominal cash value. Always compute cost-per-unit after every credit is netted, not the headline percentage.