Question 1

How do stacked discounts work?

Accepted Answer

Stacked discounts are applied sequentially, not combined. The first discount is applied to the original price, and the second discount is applied to the already-reduced price. For example, 20% off ₹5,000 gives ₹4,000, then an additional 10% off ₹4,000 gives ₹3,600. The effective discount is 28%, not 30%.

Question 2

What is the effective discount percentage?

Accepted Answer

The effective discount percentage is the total actual discount relative to the original price when multiple discounts are stacked. It shows the true combined impact of all discounts applied. For stacked discounts of A% and B%, the effective discount is calculated as: 1 - ((1 - A/100) × (1 - B/100)) × 100.

Question 3

Is a 20% + 10% discount the same as a 30% discount?

Accepted Answer

No. A 20% + 10% stacked discount results in an effective discount of 28%, not 30%. This is because the second discount is applied to the already-reduced price. On a ₹5,000 item, a 30% flat discount gives ₹3,500, while 20% + 10% stacked gives ₹3,600 — a ₹100 difference.

Question 4

When should a business offer discounts?

Accepted Answer

Offer discounts strategically: to clear slow-moving or seasonal inventory, attract new customers for first purchases, reward loyal customers, compete during peak sales seasons, or boost volume during slow periods. Avoid habitual discounting as it erodes margins and trains customers to never pay full price.

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