Stacked Discounts Explained

It is a common sight in retail: an item is marked "20% off," and you have a coupon for an "additional 10% off." Naturally, it is tempting to add these together and assume you are getting 30% off the original price.

However, mathematically, stacked (or sequential) discounts do not work by simple addition.

Why 20% + 10% ≠ 30%

When discounts are stacked, the second discount is applied to the already reduced price, not the original price. Because the second percentage is taken from a smaller number, the actual dollar amount saved is less than if the two percentages were added upfront.

Diagram showing that 20% followed by 10% stacked on $100 results in $72, an effective discount of 28%. — A 20% discount on $100 leaves $80. A 10% discount on that $80 saves $8, bringing the total to $72 (an effective 28% discount).

The Sequential Formula

To calculate the final price manually, multiply the original price by the "keep" percentage (100% minus the discount) for each step in sequence:

Final Price = Original Price × (1 - Discount 1) × (1 - Discount 2)

Worked Example

Let's trace a $100 item with a 20% store discount and an extra 10% coupon at checkout:

Step 1 (20% off): $100 × (1 - 0.20) = $100 × 0.80 = $80
Step 2 (10% off the new price): $80 × (1 - 0.10) = $80 × 0.90 = $72

If the discounts were truly 30%, the price would be $70. The actual final price is $72.

Effective Combined Rate

If you want to know the true percentage you are saving compared to the original price, you calculate the effective combined discount.

In our example, you saved $28 off the original $100. That is an effective discount of 28%.

Order of Percentage and Fixed Coupons

Does it matter if a store applies your 20% off before or after a $10 fixed coupon? Yes, drastically.

Percentage first: 20% off $100 leaves $80. Subtracting $10 leaves $70.
Fixed coupon first: Subtracting $10 from $100 leaves $90. Taking 20% off $90 ($18) leaves $72.

The order depends on the retailer's promotion terms and point-of-sale rules. Because fixed and percentage discounts can produce different totals depending on order, check the offer terms or receipt.

Compare Stacked Deals Easily

You don't need to do the math by hand. Use our Discount Calculator to stack multiple percentages and fixed coupons, and we will show you the exact effective discount rate and final checkout price.