Bargain Quest

I ignore the Kohl’s Cash and take them up on the extra 15% off deals.

But isn’t $10 twenty percent of $50? 15% off isn’t much discount.

Before I explain my reasoning, I need to clarify a couple of details and assumptions I’m making:
-The $10 offer I’m referring to is not “$10 off on every $50 spent.”
It’s the offer many large retailers are adopting these days: “For every $50 spent, receive
a $10 savings certificate for a future purchase.”
-I am assuming merchandise prices are the same
in both scenarios.
-I’m ignoring the effect of sales tax, because of variations in the ways it is calculated.

Here’s how the math plays out:

Scenario 1. ($10 certificate on $50)…. Let’s say you spend exactly $50 during the promotion and then use your $10 certificate on your next purchase, which totals exactly $10 so you don’t spend any additional money. You have received $60 worth of merchandise at a cost of $50. A 16.67% savings.

Scenario 2. (15% off)… How much would the $60 of merchandise have cost you at 15% off? $51.

You spent only $1 more in the 15% off scenario, and there are other factors to consider.

First of all, Scenario #1 figures depend on spending exactly $50 to reach the promotion level, then exactly $10 to use the certificate.  How often does that work out in the real world? If you spent $55 on the initial transaction and $12 on the second, you would be getting $67 worth for $57 - which works out to almost exactly a 15% discount (See Scenario 2!). Every dollar over the bare minimum you spend, your percent savings decreases, and anything over $57 total is under 15% savings.

My next objection is that Scenario #1 assumes you want to and encourages you to spend $50+. You spend only $48.90, you get nothing, no savings. If you have $40 or more already, you’ll probably pick up an extra item or two to put you over the top. Personally, it’s rare for me to spend the hefty sum of $50 in a single transaction. The 15% off option doesn’t have such a condition attached. I can take $3 off my $20 purchase and be happy about it, instead of stressing about what my purchase total is.

Then there’s the nature of the $10 savings certificate: It’s extremely inconvenient. My pet peeve about them is that they are frequently only valid during a period of 2 weeks or less (unlike gift cards), and that timeframe doesn’t commence until after the original promotion period ends. Within about a week, and no more than 2 weeks later, you are forced to make a second trip to the store and make an additional purchase, possibly spending substantially more than the certificate value. On the other hand, if you don’t go, the store keeps that $10 value you would have received. No wonder stores love to offer them.

The $10 savings is certainly better than nothing at all. Its widespread use as a promotional tool suggests to me that stores see both benefits to their bottom lines and positive response from consumers. I just think savvy consumers can, and should, do better by holding out at least for the 15%.