Sunday, February 15, 2015

The maths of discounting - courtesy Myantra / Jabong

An pair of shoes cost 2495 at MRP, and are being sold at a discount of 30%. So how much will you finally pay?

2495 - 2495*30% = 2495 - 748.5 = 1746.5

Pretty simple, right? Apparently Myantra and Jabong disagree. In their maths you will actually pay 1934.

Which is actually a discount of 22.5%.

The thing is that they show this 30% discount on the product page, but add up VAT at checkout. So while the product page will show 30% discounted price of 1746, the final checkout will show 1934. Normally all this is fine, as the customer knows finally what is paying.

But the issue is that if the item is not discounted, then the price you see on the product page is what you will pay on checkout. So if the product page shows 2999 at MRP, then that's the final price you pay.

Myantra / Jabong will claim that they bear the VAT if there is no discount, so some such logic. This is immaterial to the customer.

This practice is patently misleading. If you claim 30% discount, then that's the price the customer should pay.

Note that Flipkart, Amazon or Ebay don't do this. They actually list the price you finally pay.

So why can't Myantra/Jabong do the same? Why can't they just list the actual price payable by the customer? Is it too much maths?

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