Comments on: Stores Profit On Customers Bad Math Skills http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/ Bridging the gap between saving money and investing Wed, 15 Oct 2008 21:19:13 +0000 http://wordpress.org/?v=2.6.1 By: Alexa http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-49625 Alexa Wed, 23 May 2007 15:11:19 +0000 http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-49625 I remember a math teacher pointing out this same common mistake by asking the class to figure out (100 - 25%) + 25%. Most people assumed the answer was 100. It is 93.75. I remember a math teacher pointing out this same common mistake by asking the class to figure out (100 - 25%) + 25%. Most people assumed the answer was 100. It is 93.75.

]]> By: Become's Pocket Change http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-49397 Become's Pocket Change Tue, 22 May 2007 23:29:08 +0000 http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-49397 <strong>Carnival of Shopping #15...</strong> Ladies and gentlemen, brace yourselves for a wondrous collection of shopping related goodness. Our in-flight movie will be Weekend at Bernie's 2---and please refrain from crossing the streams. That would be bad. Thank you. Let us begin our journey wit... Carnival of Shopping #15…

Ladies and gentlemen, brace yourselves for a wondrous collection of shopping related goodness. Our in-flight movie will be Weekend at Bernie’s 2—and please refrain from crossing the streams. That would be bad. Thank you. Let us begin our journey wit…

]]> By: Stores Attempt To Fools Customers http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-49291 Stores Attempt To Fools Customers Tue, 22 May 2007 17:03:48 +0000 http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-49291 [...] a better explanation of the maths involved and how it works take a look at the Personal Finance Advice [...] [...] a better explanation of the maths involved and how it works take a look at the Personal Finance Advice [...]

]]> By: ToothCutter http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-47814 ToothCutter Fri, 18 May 2007 18:40:50 +0000 http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-47814 I've heard of these kinds of activities in the furniture and home-renovation stores. Especially the self-proclaimed 'luxury' stores. I've also seen people line up at recent CompUSA closure sales to buy duble-discounted items that still end up being more expensive than something you can pick up at Amazon or Newegg. I’ve heard of these kinds of activities in the furniture and home-renovation stores. Especially the self-proclaimed ‘luxury’ stores.

I’ve also seen people line up at recent CompUSA closure sales to buy duble-discounted items that still end up being more expensive than something you can pick up at Amazon or Newegg.

]]> By: livingplanet http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-47764 livingplanet Fri, 18 May 2007 15:28:28 +0000 http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-47764 a possibility, but don't people use the calculator in their cellphone? the wifey and i usually do. we've actually become mentally lazy and so use the cellphone calculator... a possibility, but don’t people use the calculator in their cellphone? the wifey and i usually do. we’ve actually become mentally lazy and so use the cellphone calculator…

]]> By: David http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-47625 David Fri, 18 May 2007 05:57:55 +0000 http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-47625 Although I agree with your general conclusion, I believe your premise is wrong. As Michael said, no store does it that way. The key point is most people will take a mental shortcut and add the two discounts before multiplying the sum against the price, rather than multiplying the price against the discounts (which always results in a higher number). It's like pricing something at 99 cents instead of a dollar; the psychological effect is thinking you're getting a better deal than you really are. In other words, the store has to a) give up less money on every item in a sale to b) sway those people on the margin (and who also can't, or can't be bothered, to do the correct math) and boost sales volume. Although I agree with your general conclusion, I believe your premise is wrong. As Michael said, no store does it that way. The key point is most people will take a mental shortcut and add the two discounts before multiplying the sum against the price, rather than multiplying the price against the discounts (which always results in a higher number). It’s like pricing something at 99 cents instead of a dollar; the psychological effect is thinking you’re getting a better deal than you really are. In other words, the store has to a) give up less money on every item in a sale to b) sway those people on the margin (and who also can’t, or can’t be bothered, to do the correct math) and boost sales volume.

]]> By: Traciatim http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-47538 Traciatim Fri, 18 May 2007 00:18:21 +0000 http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-47538 What he was pointing out would be applied if two stores had the same item and one had a 45% off sticker and the other had a 25% off sticker, and a big sign on the counter "EVERYTHING 25% OFF AT THE REGISTER!!!111!One!" You may be inclined to shop at the 25+25 store because doing quick math in your head it would seem like you are getting 50% off vs 45% off when in fact you are not. If more stores start doing this and it works, then the idea will catch on. What he was pointing out would be applied if two stores had the same item and one had a 45% off sticker and the other had a 25% off sticker, and a big sign on the counter “EVERYTHING 25% OFF AT THE REGISTER!!!111!One!”

You may be inclined to shop at the 25+25 store because doing quick math in your head it would seem like you are getting 50% off vs 45% off when in fact you are not.

If more stores start doing this and it works, then the idea will catch on.

]]> By: Michael http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-47489 Michael Thu, 17 May 2007 20:58:21 +0000 http://www.pfadvice.com/2007/05/17/stores-profit-on-customers-bad-math-skills/#comment-47489 It may be true that one discount is better than another, but I have yet to see a store that does it that way. No store I know of offers a choice of discounts, it's just there, and that's the discount. I know that I'm not getting as good a deal, but what am I going to do about it if I need the product? It may be true that one discount is better than another, but I have yet to see a store that does it that way. No store I know of offers a choice of discounts, it’s just there, and that’s the discount.

I know that I’m not getting as good a deal, but what am I going to do about it if I need the product?

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