We’ve all been there: standing at the checkout, realizing the total doesn’t match what we calculated in our heads. Or getting home and discovering that “amazing deal” wasn’t quite as amazing as we thought. Pricing can be surprisingly tricky, and retailers know it. The good news? Once you understand these common mistakes, you’ll shop with more confidence and keep more money in your wallet.
Mistake 1: Thinking 50% Off Twice = 100% Off
The Misconception: You see a sign that says “50% off already reduced items” and think, “Great! That jacket that was already 50% off is now free!”
The Reality: Stacking discounts doesn’t add—they multiply. When you take 50% off an item that’s already been discounted 50%, you’re actually getting 75% off the original price, not 100%.
Here’s how it works: Let’s say a sweater originally costs $100. After the first 50% discount, it’s $50. When the second 50% discount applies, it takes 50% off the current price of $50, bringing it down to $25. You save $75 total, which is 75% off the original price.
Why We Make This Mistake: Our brains want to take shortcuts. Research by behavioral economists Richard Thaler and Cass Sunstein in their work on “nudge theory” shows that we often make intuitive calculations without thinking through the actual math. We see “50% + 50%” and our brain wants to add those numbers together because addition feels natural.
According to a study published in the Journal of Consumer Research, approximately 64% of shoppers incorrectly calculate stacked discounts when asked to estimate their savings. This isn’t because people are bad at math—it’s because the mental model of “adding discounts” feels right, even when it’s wrong.
The Fix: Always calculate from the current price, not the original. If you see stacked discounts:
- Apply the first discount to get the new price
- Apply the second discount to that new price
- Don’t add the percentages together
If mental math isn’t your strong suit (and honestly, who enjoys calculating percentages while shopping?), consider using a price calculator to handle the heavy lifting. Sometimes tools beat mental math, especially when you’re juggling multiple items and trying to stay within budget.
Pro Tip: Retailers sometimes advertise “additional 20% off sale items” specifically because it sounds more impressive than saying “up to 60% off.” They’re counting on our tendency to misunderstand the math.
Mistake 2: Forgetting Tax in the Total
The Misconception: You load up your cart with items totaling $95, thinking you’re safely under your $100 budget.
The Reality: In most U.S. states, sales tax gets added at checkout, pushing your total to $103 or more and suddenly you’re over budget or scrambling to put items back.
This mistake is especially common because many other countries include tax in the displayed price. If you’ve traveled internationally or shop online with international retailers, you might be used to “what you see is what you pay.” In the U.S., however, sales tax typically ranges from 0% to over 10% depending on your location, and it’s added at the register.
Why We Make This Mistake: This one’s actually less about consumer error and more about retail practices. A 2016 study by Raj Chetty and colleagues published in the American Economic Review found that showing prices without tax increases consumer spending by approximately 8% compared to tax-inclusive pricing. In other words, we’re more likely to buy when we don’t see the full price upfront.
The Fix:
- Learn your local sales tax rate and build it into your mental math
- If your state has 8% tax, multiply your pre-tax total by 1.08
- Or use the quick trick: round your tax to 10% for easier mental math (10% of $95 = $9.50), knowing you’re slightly overestimating
- For a precise calculation of what you’ll really pay before the discount even applies, factor in both the sale price and your local tax rate
- Many store apps now show estimated totals including tax before you get to checkout
Mistake 3: Confusing Percentage Discount with Dollar Amount
The Misconception: You see “$20 off” and “20% off” and assume they’re roughly the same thing, or you don’t stop to calculate which is better.
The Reality: Whether a fixed dollar discount or a percentage discount is better depends entirely on the item’s price. On a $50 item, $20 off (40% savings) is better than 20% off (only $10 savings). But on a $200 item, 20% off ($40 savings) beats $20 off.
Here’s where it gets interesting: Retailers deliberately choose which type of discount to advertise based on what sounds more impressive. According to research by Joseph Nunes and Peter Boatwright in Marketing Science, retailers use the “Rule of 100” for items under $100, they advertise percentage discounts because the number sounds bigger (20% sounds better than $8 off a $40 item). For items over $100, they advertise dollar discounts because those sound more impressive ($40 off sounds better than 20% off a $200 item).
Why We Make This Mistake: We process numbers based on how they’re framed, not always by their actual value. A 2009 study in the Journal of Marketing Research found that consumers often fail to do the conversion math between percentages and dollars, instead responding emotionally to whichever format seems more impressive.
The Fix:
- Always convert to the same format before comparing deals
- Quick conversion: For percentages, multiply the price by the discount percentage (e.g., $180 × 0.25 = $45 off)
- For dollar amounts, divide by the price to get a percentage ($30 off ÷ $150 = 20%)
- When you need to work backwards say you know the sale price and want to figure out what discount you’re actually getting try your first reverse discount calculation to see the real percentage
- Ask yourself: “What’s the final price?” That’s what actually matters
Real Example: You’re choosing between two deals on headphones: Store A offers 30% off $160 headphones, while Store B offers $40 off the same headphones. Store A’s deal brings the price to $112 (save $48), while Store B brings it to $120. Store A wins, even though “$40 off” sounds impressive.
Mistake 4: Not Checking Historical Prices
The Misconception: An item is marked “Was $199, Now $99,” so you must be getting an incredible deal.
The Reality: That “original price” might have been set artificially high, or the item might regularly sell for $99 or less. Without historical price data, you have no way to know if you’re getting a genuine discount or being manipulated by a fake reference price.
This is perhaps the most insidious pricing trick because it exploits what behavioral economists call “anchoring bias,” our tendency to rely heavily on the first piece of information we receive. When you see “Was $199,” your brain anchors to that number, making $99 seem like an amazing deal by comparison, regardless of whether the item was ever actually sold at $199.
A 2018 investigation by consumer advocacy groups found that some retailers had products marked as “on sale” for over 300 days per year, raising serious questions about whether the “original price” was ever the real price. In some cases, items were listed at the inflated “regular price” for just a few days before being put “on sale” permanently.
Why We Make This Mistake: We make purchase decisions quickly, and checking historical prices requires extra time and effort. A study in the Journal of Consumer Psychology found that consumers who see a reference price (the “was $X” price) are 30% more likely to make a purchase, even when that reference price is arbitrary or inflated. The discount feels real because the numbers make it look real.
The Fix:
- Use price tracking tools like CamelCamelCamel (for Amazon), Honey, or Keepa
- Check Original Pricing to see verified price fluctuations over time real prices, no tricks, no overpaying
- Look for patterns: If an item is “on sale” constantly, that’s probably its regular price
- Compare across multiple retailers to gauge true market value
- For seasonal items, check prices in the off-season, that’s often the true low point
Real-World Example: Black Friday “doorbuster” TVs are infamous for this. A TV advertised as “Was $899, Now $399” might have been manufactured specifically for Black Friday at a lower quality standard and never actually sold for $899. Historical price tracking would reveal it’s a different model than the one that was sold year-round.
Mistake 5: Assuming All Discounts Are Real
The Misconception: If a store says an item is discounted, it must actually cost less than usual.
The Reality: Some retailers inflate their “original” or “compare at” prices to make discounts appear larger than they are. That dress marked “Compare at $120, Our Price $49.99” might never have sold for $120 anywhere.
This practice has led to numerous lawsuits and regulatory actions. J.C. Penney, Kohl’s, and other major retailers have faced legal challenges over their use of inflated reference prices. The Federal Trade Commission has guidelines stating that “former price” comparisons should be based on actual, recent selling prices, but enforcement is inconsistent, and the practice continues.
What makes this particularly problematic is the “fake urgency” factor. Retailers often combine inflated reference prices with time pressure (“Only 2 left!” “Sale ends tonight!”) to trigger what psychologist Robert Cialdini calls “scarcity bias,” our tendency to want things more when we think they’re running out. A 2015 study in the Journal of Retailing found that this combination of fake discounts and artificial scarcity increases impulsive purchases by up to 40%.
Why We Make This Mistake: We want to believe we’re getting a deal. Confirmation bias, our tendency to seek information that confirms what we want to believe, makes us accept the retailer’s narrative without questioning it. If the sign says we’re saving 60%, we want that to be true, so we don’t investigate further.
Additionally, the complexity of modern pricing makes it genuinely difficult to know what anything “should” cost. With dynamic pricing, regional variations, and hundreds of sales per year, establishing a true “regular price” is challenging for consumers. Understanding how online stores display “original price” and what it really means can help you spot these tactics before you fall for them.
The Fix:
- Be skeptical of “compare at” or “original price” claims, especially from retailers like discount chains, where everything is always “on sale.”
- Research the item across multiple stores and online retailers
- Check review sites and forums where shoppers discuss actual prices paid
- Use Original Pricing to check, compare, and trust the real price of products no marketing gimmicks, just verified data
- Remember: If a store has constant sales, those sale prices are the actual prices
- Look for the absolute price, not the discount percentage. Would you buy this at this price if there were no “sale”?
Red Flags:
- Items that are “on sale” every time you visit the store
- Extremely high “original prices” that seem unrealistic
- “Compare at” prices with no specificity about where that comparison comes from
- Round numbers for “original prices” ($299.99 marked down from $500.00 that $500 is probably made up)
Quick Reference Guide: Your Pricing Mistake Cheat Sheet
Before You Buy, Ask Yourself:
| Mistake | Quick Check | Action |
|---|---|---|
| Stacked Discounts | Am I adding percentages in my head? | Stop! Calculate from the current price, not the original. Each discount applies to the price after the previous discount. |
| Missing Tax | Did I factor in sales tax? | Multiply your subtotal by your local tax rate (or add 10% as a quick overestimate). Better to overestimate than be surprised. |
| Percent vs. Dollar | Which type of discount is this? | Convert both to actual dollar amounts or final prices before deciding which is better. The bigger-sounding number isn’t always the better deal. |
| Historical Prices | Has this price been verified? | Check price history tools before buying. If it’s “always on sale,” that’s the real price. |
| Fake Reference Prices | Does this “original price” seem realistic? | Compare across multiple retailers. Would you buy at this price without the sale? That’s what matters. |
Mental Math Shortcuts:
- For 10% off: Move the decimal one place left ($84.00 → $8.40 off)
- For 25% off: Divide by 4 ($80 ÷ 4 = $20 off)
- For 50% off: Divide by 2 (easiest one!)
- For sales tax: If your rate is 8%, multiply by 1.08; for 6%, multiply by 1.06
- To compare deals: Always calculate the final, out-the-door price including tax
The Golden Rule: The only number that matters is the final price you pay. Everything else discounts reference prices; percentages are just marketing designed to make that final number feel like a better deal than it might actually be.
Remember, retailers aren’t trying to trick you personally; they’re using proven psychological principles that affect all of us. Now that you know these five mistakes, you’re equipped to spot them, avoid them, and make smarter purchasing decisions. You’ll save money not by working harder, but by simply knowing what to look for.
The next time you’re about to click “buy” or head to the checkout, take 30 seconds to run through this checklist. Those 30 seconds could save you 30% or more, and that’s a discount you can trust.