How to Calculate Discounts: Are You Calculating the Correct 10%?

Challenge: Which method for calculating a 10% discount is correct?

The Solution: It is crucial to use the correct way of calculating discounts to avoid issues with the Commission for Consumer Protection (CCP) or, even worse, dealing with dissatisfied customers who feel misled. There are several formulas you can use to calculate the discount you are offering.

Imagine you have a product that costs 100 BGN.

Option 1: 100 BGN 10% discount = 10 BGN. The fastest formula is: 100 BGN - (100 BGN 10%) = 90 BGN (the new price with a 10% discount included).

Option 2: 10% corresponds to an index of 0.9 (100% - 10% = 90% / 100, or a 0.9 index). 100 BGN price * 0.9 index = 90 BGN (the new price with 10% included).

Option 3: (Do NOT use this for discounts; use it only for calculating prices excluding VAT) 10% / 100 + 1 = 1.10 index. 100 BGN / 1.10 = 90.90 BGN. 100 BGN - 90.90 BGN = 9.1 BGN discount, which equals a 9.1% discount. (Note: This formula works for VAT. For example: 120 BGN incl. VAT / 1.2 = 100 BGN excl. VAT).

Homework: What is the actual discount percentage in a "Buy 3 + Get 1 Free" bundle? Send your answer to: info@veselinapanayotova.com