Discount Calculator
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Promotional discounts, festival sales, and clearance markdowns are everywhere in retail. However, stacked discounts (such as "30% off plus an extra 10% off at checkout") are frequently misunderstood. An additional 10% discount is applied to the already discounted price, not added to the original 30% discount to make 40%.
The FinToolkit Discount Calculator calculates your exact final price, total cash savings, and effective percentage discount across single-tier and multi-tier stacked discount promotions.
How stacked retail discounts work
In retail promotions featuring secondary or coupon discounts, reductions are applied sequentially:
Final Price = Price after Primary Discount × [ 1 − (Discount 2% / 100) ]
Total Cash Savings = MRP − Final Price
Worked discount comparison
Consider an item with a Maximum Retail Price (MRP) of ₹2,000 on sale with a primary 20% store discount, plus an additional 10% coupon applied at checkout:
| Calculation Step | Computation | Price / Value |
|---|---|---|
| Original Tag Price (MRP) | Starting price | ₹2,000 |
| Primary Discount (20%) | 20% of ₹2,000 | −₹400 |
| Subtotal after Primary Discount | ₹2,000 − ₹400 | ₹1,600 |
| Extra Coupon Discount (10%) | 10% of ₹1,600 (not 10% of ₹2,000!) | −₹160 |
| Final Price You Pay | ₹1,600 − ₹160 | ₹1,440 |
| Total Cash Savings | ₹400 + ₹160 | ₹560 |
| Effective Total Discount Percentage | ₹560 ÷ ₹2,000 × 100 | 28.0% (not 30%!) |
A "20% + 10%" promotion equals an effective discount of 28.0%, not 30.0%. Understanding sequential compounding prevents overestimating promotional markdown savings.
Evaluating "Buy 2 Get 1 Free" offers
Common retail promotional structures carry specific mathematical equivalents:
- Buy 1 Get 1 Free (BOGO): Exactly 50.0% discount across 2 items of equal value.
- Buy 2 Get 1 Free: You pay for 2 items and receive 3 items. Effective discount = 1 ÷ 3 = 33.3% discount.
- Buy 3 Get 2 Free: You pay for 3 items and receive 5 items. Effective discount = 2 ÷ 5 = 40.0% discount.
Frequently asked questions
Is GST calculated on MRP or the discounted price?
Under Indian commercial law, when an item is sold below MRP, GST must be calculated on the actual transaction value (the final discounted selling price), not the original pre-discount MRP.
Can a retailer sell above the printed MRP?
Under the Legal Metrology (Packaged Commodities) Rules, selling packaged goods above the printed Maximum Retail Price (MRP) is illegal in India. MRP is inclusive of all taxes.
What is the difference between markup and discount?
Markup is the percentage added to the cost price to determine selling price. Discount is the percentage deducted from the selling price (or MRP) to arrive at the final transaction price.
Related retail & business calculators
- GST Calculator — calculate applicable Goods and Services Tax on discounted base prices.
- Break-Even Calculator — evaluate how discounting affects business profitability.
- In-Hand Salary Calculator — manage household cash flow and monthly spending budgets.
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Data sources
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