Deal psychology: Which discount is best?

8

Today’s post is only tangentially related to miles & points, though it is related to deal hunting — or more specifically, the way that deals are framed and how it can sometimes be hard to know the best deal without digging into the details. Despite the title, this isn’t a deep look at the psychology of it — I’ll leave that to academia — but rather a cursory glance at how simple variations in advertising and terms can vary the quality of a deal considerably.

A key note

The reason this post has been on my mind is because I recently bought eyeglasses online and the way deals are advertised at the site I use reminds me of the way we see lots of deals advertised — whether they be deals to buy points/miles, credit card bonuses, or other types of deals in our hobby. While I’ve been buying my glasses from an online webstore for about the last ten years, this post isn’t meant to be any sort of official endorsement that anyone else do the same. I’m no eye doctor and I am not intending to tell you how to handle your eye health.

Again, the purpose of the post isn’t the specific site, sale, or product (which is why I don’t mention the specific site — you can Google the codes if you’re interested): the impetus here was seeing how many ways there are to advertise a deal that is almost the same and how it isn’t always immediately clear which deal is best without digging into the numbers.

A constant barrage of emails

One of the downsides of buying eyeglasses from the cheap online store where I buy mine is that they email promotions gratuitously. I kid you not when I say that I receive a daily email from them advertising a “today-only” promotion. The truth is that this is not  a downside for the purposes of today’s post since it provides a good example. In the past ten days or so, here are email headlines:

As I said, I’ve been buying from them for 10 years. At some point, I placed an order under a separate email address and as such I receive daily emails at two different addresses. Somewhat interestingly, I noticed that the email promotions at the two email addresses aren’t always identical. That’ll make sense in a minute.

“Normal” product pricing

Key to following all of these deals is to understand the “normal” pricing of products on this particular site. The information in this section is just meant to give a basic understanding of how the pricing works without a discount code in order to make sense of discounts later.

Most of the glasses frames they sell fit into these price bands (with very few sets of frames in some of the price bands, most of the frames on the site are priced at the four price points in bold below):

  • $6.95
  • $12.95
  • $15.95
  • $19.95
  • $24.95
  • $29.95
  • $34.95
  • $39.95

Further, standard 1.56 CR39 lenses are always free. If you want polycarbonate lenses or extra thin lenses, those cost something extra. I’ll leave those out of the discussion for the purposes of this post.

They sell add-on coatings as follows:

  • No coatings = $0
  • Anti-Reflective, UV and Scratch Resistance coatings = $5.95
  • Above coatings + “Hydrophobic” coating = $11.95

Finally, they also sell a number of different sunglass tints with different pricing. This will come into an example later. Note that that all but the polarized tints can be applied to the free standard 1.56 CR39 lenses noted above.

The polarized sunglasses require a polarized lens that is an additional $49 add-on on top of the $29.95 / $39.95 prices above.

They also sell the “transitions” style lenses. Again, I’m not including that here as it doesn’t apply to my examples.

Most of the deals they advertise

Most of the deals they advertise break down as follows:

Percent-off deals

  • 40% off sitewide & free standard lenses. Coupon code GLASSES40
  • 45% off entire order including shipping. Coupon code GLASSES45
  • 50% off entire order. Coupon code GLASSES50
  • 50% off on all premium lenses (Sunglasses, Photochromic, Digital Screen Protection Lenses). Coupon code GLASSES50. Note that this is the same exact deal as the one immediately above this, but it was advertised as 50% off the premium lenses rather than off the entire order, presumably to draw attention to their premium lenses.
  • 55% off entire order (frames & lenses). Coupon code 55G4U
  • 65% off entire order (frames & lenses). Coupon code US65G4U
  • “Up to 70% off” as follows:
    • 50% off $6.95 frames. Coupon code G4U695
    • 50% off $9.95 frames. Coupon code G4U995
    • 60% off $12.95 frames. Coupon code G4U1295
    • 60% off $15.95 frames. Coupon code G4U1595
    • 70% off $19.95 frames. Coupon code G4U1995
    • 70% off $24.95 frames. Coupon code G4U2495

Flat price deals

  • BOGO: Buy One, Get One Free (the cheaper of 2 pairs is free including the full cost of any add-ons). Coupon code BOGO
  • Get 2 pairs of complete eyeglasses for $8.99 + shipping. Coupon code GLASSES899. (only includes $6.95 frames & 1.56 CR single vision uncoated lenses).
  • “All frames” for a flat $6.95. Applies to frames ordinarily priced at $6.95-$29.95 (which includes most of the site, though they do have two higher price points). Codes as follows:
    For $9.95 Frame, use code: 1G4U695    |  For $12.95 Frame, use code: 2G4U695For $15.95 Frame, use code: 3G4U695  |  For $19.95 Frame, use code: 4G4U695For $24.95 Frame, use code: 5G4U695  |  For $29.95 Frame, use code: 6G4U695
  • First pair for $9.95 delivered. Coupon code GLASSES995. Includes frame, lenses, shipping, and UV, Anti-Scratch, and Anti-Reflective coatings. Note that the headline says to “get your first pair” for this price, but the fine print says “To order more than one pair, multiple orders are allowed”. This price only includes the $6.95 frames.
  • Get a complete pair of glasses for $3.99 plus shipping. Coupon code GLASSES399. Only includes $6.95 frame and standard uncoated lenses.

These deals are often advertised as “today-only” or “hours left” or “the clock is ticking”. But here’s the thing: all of the codes work all of the time. They don’t change coupon codes and despite the fact that emails advertise deals ending on specific days, they never deactivate any of them. The 65%-off code above was a July 4th deal that got “extended” on July 5th and again on July 6th, with the email on the 6th saying that there were “hours left”. The code still works more than a month later. I eventually realized that this is why the email discounts from my two email addresses didn’t always match: all of the deals appear to be active all of the time.

That’s great for the purposes of illustration. We often see airlines and hotel programs offer points “with a 50% bonus” or for “30% off” — clearly designed to make it a little confusing as to which is the best deal unless you keep up with the math every time. This deal makes it easy to compare (and to see that any given day, some customers fall for a less-than-best deal).

Which discount is the best?

I started shopping by adding a pair of $24.95 glasses to my cart (not a pair I am really ordering) and selected the free standard lenses with no coatings. Shipping always adds $5.95 (at least on orders of 1-2 frames; I haven’t placed a single order for more than 2 frames at a time in years. It’s possible that larger orders incur a higher shipping cost). With shipping, that brought my total to $30.90.

Here was the pricing with the various promotion codes added with standard shipping included:

  • 40% off = $20.92
  • 45% off = $16.99 (remember that this code also applies to the shipping charge)
  • 50% off = $18.42
  • 55% off = $17.18
  • 65% off = $14.68
  • 70% off = $13.44
  • Flat $6.95 pricing = $12.90

Note that the 45% off code was actually better than the deals at 50% off or 55% off since the discount also came off of the shipping charge.

Unsurprisingly, the flat $6.95 frame promo wound up being the best deal given the $24.95 original price point.

However, with a pair that was originally $19.95, the best deal shifts:

  • 40% off = $17.92
  • 45% off = $14.25 (remember that this code also applies to the shipping charge)
  • 50% off = $15.93
  • 55% off = $14.93
  • 65% off = $12.93
  • 70% off = $11.94
  • Flat $6.95 pricing = $12.90

Now the best deal is 70% off.

But with a set of frames with a standard price of $6.95, the story changes yet again:

  • 40% off = $10.12
  • 45% off = $7.09
  • 50% off = $9.42
  • 55% off = $9.08
  • 65% off = not valid (can’t be used on the $6.95 frames)
  • “Up to 70% off” = $9.42 (it’s only a 50% discount on $6.95 frames)
  • Flat $6.95 pricing = $12.90

Now the best deal by far is the 45% off deal because of the discount on shipping. Under flat pricing, there is a deal for two pairs for $8.99 plus shipping. That deal sounds like it might be even better, but it isn’t: $8.99 + $5.95 = $14.94. Divide that by 2 and it’s $7.47 per pair — a bit more expensive than the 45% off deal.

Things start to get more complicated with add-ons. For example, that $7.09 price above does not include any coatings. Under flat pricing above, there is a code for a complete pair for $9.95 with the UV / Anti-scratch / Anti-reflective coatings. They ordinarily charge $5.95 for those coatings, so the code for a complete pair for $9.95 is a slightly better deal (the 45% off deal would be less than fifty cents more expensive).

It gets a bit more confusing yet if you want to get spendy. Believe it or not, even though I’ve been ordering for years and had long noticed that deals came around in cycles, it wasn’t until recently that I noticed that all of the codes work all of the time. Truth be told, these glasses are cheap any way you slice it, so I haven’t been particularly concerned with whether I overpaid by two or three bucks on a couple of pairs of glasses every year or two. That’s not the point of this post — the point is looking at how it isn’t immediately clear whether 45% off or 65% off or a flat price deal is best.

This time, I was interested in getting a pair of prescription sunglasses. I’ve bought sunglasses from them before, typically paying the $5.95 for a standard one-color tint. A few months ago, I bought a pair with a gradient tint. I neither love them nor hate them. For less than 20 bucks for prescription sunglasses, that’s a good enough review for me.

I think they only recently added the option for polarized lenses. I like polarized sunglasses and have a couple of name brand pairs. I was particularly curious to see how these cheap prescription polarized lenses would compare. Except they weren’t cheap. (And note that I ordered a couple of weeks ago but haven’t received them yet, so no review on the polarized lenses yet).

I hadn’t realized that the polarized option would also necessitate a more expensive lens. Adding the polarized mirror tint to a set of $29.95 frames came to a total of $124.85:

  • $29.95 frame
  • $39.95 polarized mirror tint
  • $49.00 polarized lens
  • $5.95 shipping
  • $124.85 total

While that’s about what many name-brand sunglasses cost without prescription lenses, it was more than a cheapskate bargain shopper like me was willing to pay.

I had long known that code BOGO would work as a buy one, get one free sale that seemed to work perpetually and would give you the cheaper pair for free, including any add-ons. In other words, I knew that I could add a second pair with the same polarized mirror tint for the same total price of $124.85. That’s about $62.43 per pair. For prescription polarized sunglasses, that’s surely a lot less than I’d pay at a store…but I didn’t really want to spend a hundred twenty four bucks and while I wanted the glasses, I didn’t really need one pair — I definitely didn’t need two.

That’s when I started combing through emails and I discovered that all of the above codes would work. Sure enough, they all did. And this round, yet a different discount was best for this situation.

  • 40% off = $77.29
  • 45% off = $68.66
  • 50% off = $65.40
  • 55% off = $59.45
  • 65% off = $47.56
  • 70% off = not valid on $29.95 frames (and this discount is only on the frames, not lenses)
  • Flat $6.95 pricing = $101.85

This time, the best deal by far was 65% off. Paying $47.56 for one pair of prescription polarized sunglasses sounded a lot better than paying $124.85 for two. I placed my order. It usually takes 2-3 weeks to receive the glasses, so I probably won’t seem them for another week or so.

Bottom line

If I told you that you could get 45% off or 65% off or 70% off, one would think it would be immediately clear what the best discount is. The truth is, companies play with the numbers all the time. We see this frequently in sales on miles and points and via hotels: it isn’t always immediately apparent what the best deal is (note that we maintain the history of miles and points sales, complete with the math on the price-per-point, in this post: Buy points for less. When does it make sense to jump on a deal?). Furthermore, figuring that out isn’t always as time-pressing as it seems. If there’s one thing I’ve learned in this game, it’s that another deal is always coming, so don’t get pressured into jumping on any deal right now without running the numbers.

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