Hi,
So the question is…If you buy a item with a gift card which you got a certain x% off, what does the effective price of the item become? I'm quite certain its not x% off the item…but i can't figure out the math for it, i can do it in a large scale but i want to effectively be able add the per item costs into my spreadsheet.
Thanks in advanced fellow OZbargainers!
Thanks. Well said and explained with the examples
The effective price of the item will still be x% off.
For illustrative purposes, let's say you bought a gift card of $100 for $80. In other words, at 20% discount.
Now suppose you use your gift card and buy merchandise of $100.
This corresponds to $80 of your out-of-pocket money, or $20 discount.
So once again, (100-80)/100 = 20% off.
Edit: Just saw BlazinPast's comment above who explained it very well (right after I submitted).
( ( OriginalPrice - PaidPrice ) / OriginalPrice ) * 100
for stacking discounts.
i.e.
OriginalPrice = 110
PaidPrice = 80
assuming the item had a 10% off discount and you then used your hypothetical $100 gift card you got for $80 …
( ( 110 - 80 ) / 110 ) * 100 = 27.27*%
So let's say you bought a $100 valued gift card for $90. That's 10% off.
If you were to buy a $100 watch with that gift card it'd essentially be $90 since that's what you paid for that card. So it's still 10% off.
This is assuming you use the full value of the gift card. Even if you bought 2 watches for $50 each, the discount is still 10% off each.
But let's say you just bought a $95 watch and didn't end up using the rest of the money in the card. You only spend $90 on the card yet bought something $95 in value. So you only paid 90/95 * 100 = 94.74% of the price which is roughly 5.26% off.
So in general if you want to know what the discount is when finished using the card it'd be: 100 * [1 - (money paid for the card)/(amount spent)]. So in our first case, the (money paid for the card) is $90 and the (amount spent) is $100. So 100 * [1-(90/100)] = 10% off.
If you want to know the 'effective' price of the item you bought, it depends on how much value of the card you used up. The formula for that would be [(money paid for the card)/(money used up on the card)] * (value of the particular item). So let's go back to our initial scenario where we have a $100 gift card bought for $90. Let's say you bought a $50 watch, $30 clock and $12 toy. We spent $92 altogether. The (money paid for the card)/(money used up on the card) = 90/92. Now multiply this with each item. You'd get $48.91 on the watch, $29.35 on the clock and $11.74 on the toy.
Now, let's say the cost of the toy this time was $20 meaning the total money spent on the card is $100. This means we used the full value of the card and should expect 10% off each item. The (money paid for the card)/(money used up on the card) = 90/100. Multiply that with each item and you get $45 for the watch, $27 for the clock and $18 for the toy as you'd expect.
Hopefully that made some sense.