It’s Monday, I’m Nithya Sudhir. I collect words, chase patterns, and write about whatever makes me curious.
Why stacked discounts beat the math in shoppers' heads
In the 1980s, A&W decided to take on McDonald's Quarter Pounder.
So, they launched the Third Pounder with great buzz.
It had more beef. It won taste tests. It was built to succeed.
But it flopped.
A&W gathered focus groups and when asked why, more than half of the participants questioned the price.
They asked, "Why pay the same for a third of a pound as for a quarter-pound?"
Of course. Three is smaller than four. Right?
Here’s A&W’s own blog post on the whole Third Pounder mix-up!
It's one of the most vivid examples of how math stops being math when we shop. Shoppers don't relate to numbers the way math wants them to.
Today, we look at one such pricing behavior that can work for brands this BFCM.
It's Monday. Let's get into it.
🤝 This edition is kindly brought to you by Omnisend
Instagram will send you plenty of first-time viewers this season, and that attention fades by December. With Omnisend’s Social Capture, a keyword in your caption does the capturing. Followers comment or DM it, get a DM asking for their email, and reply to join your audience as subscribers. Every campaign after BFCM can reach them. Omnisend brands see up to a 35% lower bill than Klaviyo for the same power.
Is 20% plus 25% really 45%?
No. It's 40%. But most shoppers see 45%.
Let's do the math.
Take a $100 item.
20% off brings it to $80.
However, the extra 25% off (off the 80, this time) takes another $20, leaving $60.
That's 40% off.
Easy math, right? Not for most shoppers.
In fact, in 2005, two marketing professors ran an experiment on 12 bamboo cutting boards in an upscale kitchen store.
For two weeks, the boards were 40% off.
For the next two, they were 20% off, plus an extra 25% off.
The stacked weeks drew more buyers, sold more boards and earned more revenue and profit. When the store flipped the order that September, the stack won again.
To find out why, they asked people to work out the total discount.
59% simply added the percentages.
Only 26% got it right.
And the deeper the discounts, the wider the gap, and the more generous the offer looks.
A 25% off plus an extra 25% feels like 50%, while it only actually works out to be about 43%.
The trick stops working in three situations.
When shoppers have a reason to check. Paying people $2 for the right answer cut mistakes from 44% to 26%.
When the numbers are easy. Round pairs like 50% plus 20% halved the mistakes.
When the total looks impossible. It's hard for the consumer brain to believe 70% plus 45% means 115% off.
Why do shoppers add?
1. Multiple-percentage processing error.
We treat percentages like whole numbers and add them up.
Chen and Rao found that shoppers forget the first discount moved the base, which turns 20% plus 25% into 45%. The second number does free work.
2. Whole number dominance.
Our brains are built for counting, not compounding.
Our mental number system favors whole numbers over fractions, decimals and percentages. The same bias makes people think 0.17 is bigger than 0.7, because 17 is bigger than 7. It's the same reason a third of a pound lost to a quarter.
3. Effort-accuracy trade-off.
Shoppers skip the math when it isn't worth the effort.
People choose how to decide by weighing effort against accuracy. While watching 800 shoppers in a supermarket, researchers found that people took about 12 seconds to pick an item and drop it in the cart. However, more than halfcouldn't name the price of the item when asked.
This Black Friday, numbers are going to play the same trick!
So, show both numbers in the subject line, the homepage banner and on product cards ("20% off + an extra 25%"). Then show the final price at checkout, where shoppers slow down and deserve the real number.
Image Source: Whop
Bev Turns One Discount Into a Ladder
Bev, a canned wine and spritzer brand, had a problem most drinks brands know. Liquid is heavy to ship, so small orders eat the margin.
In summer 2022, Bev layered its discount into three steps.
15% off to start.
20% off once the cart passed $150.
25% off at $250 or more.
Then it did the math for shoppers. A "motivator bar" on the site showed the discount growing as the cart filled up. Nobody had to calculate a thing.
The result was a 178% revenue lift over Bev's usual baseline during its Fourth of July sale. The buyers weren't only bargain hunters either. Most were top- and mid-funnel shoppers who needed a nudge, and many went on to buy again, according to Bev.
How DTC brands can stack discounts this BFCM?
Split the discount in two. Run 20% plus an extra 25% instead of 40%. Whole-number brains read two round numbers and add them.
Keep each step small and round. 15, 20 and 25 read at a glance. In BFCM 2025, Klaviyo brands offering the smallest discounts saw the highest growth, up 14%. Low-AOV brands did best at 20–29% off and mid- to high-AOV brands at 30–39%.
Make every step feel like an extra. Each tier should land as a bonus on top of the last one. Chen and Rao suspect that words like "extra" and "additional" nudge shoppers to add the numbers.
Do the math for them, then show the real price. Nobody trades effort for accuracy at Black Friday speed. Remember, reference prices still need to hold up under the rules covered in Is your pricing breaking the law?
Black Friday will be full of big single numbers. 40% off. 50% off. At the very least!
Who knows, two smaller numbers might feel bigger.
I hope you enjoyed today’s edition.
What do you think about stacked discounts? Hit reply and let me know!
How's the depth of today's edition?
As always, hit reply if something in here hits home.
Until next time,
Nithya
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