Checkout Math: Why It Pays to Know About Percentages
Coupons, discounts and sale prices, oh my! It can be easy to just stand back and let the registers do the work, but it really is important to know what that discount is doing for your wallet. Because, when it comes to saving money, being aware of just how much that percentage-off is saving you is a matter of dollars and sense.
I encountered a case of unequal percentages during a recent shopping trip.
My local grocery store has an ongoing promotion which offers customers a coupon for 30% off their entire purchase once that customer has spent a particular amount in the store. When the day finally came to cash in on this great offer, I decided to take my parents to the store with me that day, so we could shop together and make the most of the discount. The coupon, however, had other ideas. After every last item in our (very) large order had been rung, the cashier found that she could not get the coupon to work no matter how hard she tried. After a while, she called over the store manager and he also tried, and tried, but to no avail. Finally, the manager told the cashier to use three 10% coupons on our order to make up for the pesky 30% coupon. My savvy father immediately spoke up and said, “That's fine, so long as you take each coupon off the original total.” The cashier was a bit confused as to why and he patiently explained to her that, in terms of percentages, 20 plus 10 does not equal 30. In fact, if she processed the coupons the way manager suggested, we would not have received the full 30 percent discount.
Discounts By the Numbers
Percentages can be tricky, because you do not add and subtract them as you would a whole number. They get extra tricky when you need to take multiple percentages off a single amount. Here, I will break down just why three 10% off coupons are not equal to using just one 30% off coupon.
Say that you have a grocery order that totals exactly $100. If you were to apply a 30% off coupon to that total, you would be subtracting $30, which would bring your final total to $70. It is a simple calculation, which I shown below:
100 x .30 = 30
$100 - $30 = $70
A 10% off coupon would take $10 off the $100 total. However, here is where it gets tricky! Each subsequent 10 percent-off coupon would then take 10% from the running total. So, if the cashier were to apply each of the coupons to the running total instead of the original total, it would pan out like this:
10% coupon number one:
100 x .10 = 10
$100 - $10 = $90
10% coupon number two:
90 x .10 = 9
$90 - $9 = $81
10% coupon number three:
81 x .10 = 8.1
$81 - $8.1 = $72.90
If each 10 percent-off coupon is applied to the running total, the final total would be $72.90. Which means you would have paid $2.90 more than if you had used the single 30% off coupon! Unless, of course, each of those 10 percent-off coupons had been deducted from the original total.
You do not need to be constantly crunching numbers at the checkout, but it does help to be aware of what's going on with your order. I am guilty of “zoning out” once I get to the cashier, then not realizing what's happened until I'm home. Or the next day! Human and computer errors at the register do occur from time to time, so make sure that you keep an eye on your total and percentage amounts. Many stores offer itemized receipts – both in-store and online – which makes it easy for you to review how much has been discounted. Before leaving the store, I find a quiet spot where I can thoroughly review my receipt.
In Case of Error, Be Courteous
What became of the 30% off coupon? After courteously explaining the issue to our cashier, she was able to correctly process the coupon. And she was glad for the helpful hint, too! If you do find out that there's been an error – no matter who made it – I encourage you to be courteous to staff when you explain. You may need to be firm, but there's no need to become a sour shopper.