The Checkout Counter Panic
We've all been there. You walk into your favorite brand store and see the massive red sign: "50% OFF". Below it, in tempting small print: "Extra 20% OFF Clearance".
Your brain does the quick math: "50 plus 20 is 70. Wow, 70% off! This $100 jacket will only be $30."
You rush to the counter, ready to score the deal of the century. Then the cashier says:
"That will be $40, please."
Did you calculate it wrong? Or is the register broken?
Neither. You just fell for the Double Discount Illusion. The math (and the store) didn't lie to you—your intuition did.
The Secret: The Shrinking Cake
Stores love using "Stacked Discounts" because they know most people effectively add percentages together. But discounts aren't addition. They are multiplication.
Let's visualize that $100 jacket as a Whole Cake.
Cut #1: 50% Off
The store cuts the price in half.
$100 → $50
Cake Remaining: $50
Cut #2: Extra 20%
Here is the key. You are NOT cutting 20% off the original $100. You are cutting 20% off the tiny $50 cake.
The Reality
You saved $50 (first cut) + $10 (second cut).
Total Savings: $60.
60% Off
Not 70%
Total Price: .
That "Extra 20%" sounded huge, but mathematically, it was only worth 10% of the original price.
Real World: The Invisible Wallet Killers
The "Buy One, Get 2nd 50% Off" Trick
This sounds like a massive deal. But do the math: You pay 100% for the first item and 50% for the second. Total paid: 150% for 2 items.
150 / 2 = 75% per item.
Reality: It's just a 25% Off sale disguised as a 50% Off event.
Tipping on the Tax
In many places, sales tax is around 8-10%. When the card machine asks for a "20% Tip", it often calculates it based on the total after tax. You are literally tipping the government's tax money. It's a "reverse discount" where the base cake keeps getting bigger!