Price perception: how to explain product prices and evaluate discounts

To help customers assess a price, a store needs to show how much product they are paying for, which features they get, and how much the entire purchase will cost. For a promotional offer, explain the discount terms clearly and check that the checkout calculates the same amount the customer sees.

Store owners should start by checking price tags, product pages, and actual selling prices, then calculate the effect on gross profit before offering a discount. The calculation, audit, and comparison examples below are hypothetical scenarios to adapt to your own product range. They can help organize a review, but they do not guarantee higher sales.

Explain what the customer gets for the stated price

When working on how customers perceive prices, it helps to find out what they are comparing. They may be looking for the lowest purchase total, a lower price per kilogram, or a specific configuration. A salesperson can explain the differences between offers by first clarifying the customer’s needs and then stating the product’s verified features.

For example, in a hypothetical conversation about laundry detergent, a salesperson could ask: “Do you need a smaller pack with a lower purchase price, or are you comparing the price per liter?” After the customer responds, the salesperson shows both prices. If the customer is comparing different detergents, the salesperson also clarifies their intended use and recommended dosage based on the manufacturer’s information.

For a more expensive product, prepare a brief explanation of its specific differences. These might include the material, capacity, what is included in the set, or a service the store provides. Each point should match the manufacturer’s description or the actual terms of sale. A claim that something “will last twice as long” needs evidence; the price difference alone does not support that conclusion.

Show the price for the same unit

When packages differ in weight, volume, or quantity, comparing only their package prices leaves customers to do extra calculations. Baymard recommends showing the unit price for products sold in different quantities and sizes, as well as an estimate of the full order cost near the purchase area. These recommendations can be used when designing product pages and price tags.

Unit price = package price ÷ quantity of product in the package. Choose the same unit for comparison, such as a kilogram, liter, or individual item. If the store shows the price per 100 g, all products in that comparison should be calculated per 100 g.

A hypothetical example comparing two packages of the same product:

In this example, Package B costs 55 UAH more, but its price per kilogram is 20 UAH lower. That is 10% less than the 200 UAH per kilogram in Package A. The salesperson could explain: “The smaller package costs 80 UAH. The price per kilogram is lower in the larger package, but you’ll pay 135 UAH for the package.” The customer can choose the quantity that suits them.

For concentrated products, you can also calculate the cost per use if the manufacturer specifies the dosage. For example, a hypothetical bottle costing 180 UAH, which provides 30 uses at the stated dosage, costs 6 UAH per use. Show the dosage alongside the calculation and explain the conditions used to arrive at that number: a different amount per use will change the result.

Compare products using the same criteria

For a hypothetical comparison of two offers, you can prepare a short table and fill it only with verified information. It can help a salesperson explain the differences and identify cases where the prices apply to different products or terms.

If a feature is missing from the description, mark it as unknown and check with the supplier. Assumptions about quality or what is included do not provide a reliable basis for a price comparison.

Calculate the full purchase total before checkout

In a hypothetical online store, a product may cost 900 UAH and the selected delivery option 80 UAH. If there are no other charges, the customer will pay 980 UAH. If another offer costs 950 UAH and includes free delivery under the terms of that order, its total will be 30 UAH lower.

For this scenario, show the product price, available delivery methods, and their costs near the listed price. If the amount depends on the address, weight, or payment method, customers need to know how it is calculated and be able to check the total. Label an estimated amount as an estimate, and show the final amount before the customer confirms the order.

In a physical store, the same kind of check is useful for sets and additional services. If a customer needs a product, a separate fastener, and installation, the salesperson can calculate the full amount and confirm which items or services the customer wants.

Explain the actual discount terms

Under parts 4–6 of Article 15 of the Law of Ukraine “On Protection of Consumer Rights” No. 1023-XII, the terms “discount” or “reduced price” may be used for products sold directly by a store if the offer is available for a specified, limited period and the price is below the regular price. For a “sale,” the store must also define all products in a particular location or a clearly specified group of products. After announcing the offer, the store must tell customers the prices before and after the reduction. These rules also apply to food products.

When preparing a promotion, we recommend asking a responsible employee to make a list of products and verify that the offered price is actually below the store’s regular price. Show customers the prices before and after the reduction, state the offer’s start and end dates, and identify the stores where it will be available. If the price depends on the quantity purchased, a customer card, or a code, explain those terms in the announcement. Before publishing it, check the announcement against the sales settings so customers can get the stated price under the described conditions.

For example, for a hypothetical offer of 10% off when customers buy at least two items in one transaction, a responsible employee could prepare an announcement listing the products, start and end dates, and store addresses. Explain which products count toward the required quantity and which products receive the discount. If the store does not combine the promotional discount with a customer card discount, include that condition in the announcement as well. Before publishing it, the employee checks at the checkout that the prices match the stated terms.

The discount percentage is calculated from a specified base price. If a hypothetical product cost 1,000 UAH and costs 850 UAH during a promotion, the difference is 150 UAH, or 15% of 1,000 UAH. For an internal review, you can keep a history of the prices actually set and records of changes.

How discounts are combined also affects the total. Two hypothetical discounts of 10% and 5% add up to 15% when added arithmetically: a product priced at 1,000 UAH will cost 850 UAH. Applied one after the other, the total will be 1,000 × 0.90 × 0.95 = 855 UAH, for a total discount of 14.5%. Explain to the customer which calculation method applies.

If the store submits a promotional price to Google Merchant Center through the sale_price attribute, it must also submit the regular price through the price attribute. The product page must show both prices, while checkout must show only the promotional price. The promotional price must be lower than the regular price and must match in the submitted data, on the product page, and at checkout. Before launch, the responsible employee checks these values for the same product variant. To have the service apply the promotional price during the planned period, the store submits the dates through the sale_price_effective_date attribute; without them, the service will start using it immediately. Full requirements are in the official Google Merchant Center Help Center.

Calculate the gross margin before offering a discount

Gross profit = revenue − cost of goods sold. Gross margin = gross profit ÷ revenue × 100%. Markup is calculated from cost, so its percentage differs from gross margin.

Consider an explicitly hypothetical example: the cost of one unit is 600 UAH, the regular price is 1,000 UAH, and the discount is 10%. All amounts are stated on the same basis, excluding VAT. The cost stays the same, and there are no returns.

The discount reduced gross profit per unit by 100 UAH, or 25% of the original 400 UAH. Gross margin fell by about 6.67 percentage points.

If the store sold 30 units without a discount in this hypothetical scenario, it earned 30 × 400 = 12,000 UAH in gross profit. At the promotional price, it would need to sell 12,000 ÷ 300 = 40 units to earn the same amount. The required increase in quantity is about 33.33%. This is a calculation of the sales volume needed to maintain gross profit, not a demand forecast.

When deciding whether to run a promotion, you can separately account for advertising, employees’ additional work, delivery paid for by the store, and other promotion costs. For example, with hypothetical additional costs of 1,500 UAH, the store needs 13,500 UAH in gross profit to have 12,000 UAH left after those costs. At 300 UAH profit per unit, it needs to sell 45 units. This example does not include rent or other store expenses, so the amount is not the business’s net profit.

Repricing products and checking discounts in Торгсофт

In the “Документ → Акт переоцінки” mode (“Document → Revaluation Act”), you can prepare new prices and apply them at a selected time. The act records its number, employee, date, and comment so employees can review the change history. According to the revaluation instructions, the person responsible adds products, sets new prices, prepares labels, and runs the “Застосувати переоцінку” action (“Apply revaluation”), selecting the required stores. Before doing this, they check price synchronization: if it covers the whole chain, it is enough to apply the act for one accounting center, and prices will also change at other locations. If the settings specify a central accounting center, the act must be applied for that center. After repricing, the employee checks that the price tags match the selling prices.

In the “Маркетинг → Акції” mode (“Marketing → Promotions”), the responsible employee sets the products, period, and discount terms, then checks which stores and customers the offer applies to. For a retail promotion, note the limitation: it applies to retail prices, but not to prices in the “Ціна зі знижкою” field (“Discounted price”). On the “Результат” tab (“Result”), the employee reads how the program interprets the specified terms. After saving changes, they restart the program or click “Нова реалізація” (“New sale”) when opening the “Реалізація” form (“Sale”) to check the updated promotion. Before launch, the employee checks purchases that do and do not meet the announced terms, as well as how the promotional and customer discounts combine. The program determines which discount to apply based on its priority and combination settings, so the employee checks the final price of each receipt item. See the promotions help guide for details.

The “Аналіз → Аналіз використання знижок” mode (“Analysis → Discount Usage Analysis”) helps review sales for a period and filter them by discount type, employee, accounting center, or customer. The table includes selling prices, amounts, applied discounts, and product profit. The owner compares these figures with the cost of goods sold and promotion expenses to assess the promotion’s results. Product profit does not include all business expenses, and the report alone does not prove that the promotion caused a change in sales. The discount usage analysis instructions explain the process.

Audit how prices are explained in the store

For a hypothetical first audit, you could select 20 items: five frequently sold products, five products in different package sizes, five promotional products, and five products customers ask about when discussing price. This is an example of how to organize the work; the store can adjust the number to fit its product range.

1. The responsible employee checks the name, SKU, quantity, and product version on the price tag against the product itself and its record in the inventory program, to confirm that the price applies to that specific offer.
2. The employee compares the prices on the tag, product page, cart, and during checkout in the sales channels the store uses.
3. The employee recalculates the unit price by hand and checks whether neighboring offers can be compared using the same unit of measurement.
4. The employee checks whether customers can see the full total for the required configuration and selected services before confirming the purchase.
5. The employee compares the announced promotion terms with the settings and the results of test purchases to identify discrepancies before sales begin.
6. The owner or manager asks the salesperson to explain the difference between two offers in line with the customer’s needs, then checks that they use verified product features and correct calculations.

You can record the results in a table with the fields “product,” “issue found,” “what to fix,” “responsible person,” “deadline,” and “result of recheck.” For example, for a hypothetical product with an incorrect price per kilogram, the task would be to recalculate the figure, replace the price tag, and check it again. This record makes it possible to verify that specific work has been completed.

Compare two ways to explain a price under controlled conditions

After correcting errors, you can check whether extra information helps customers. For a hypothetical comparison in an online store, both product page versions can have the same price, features, and terms of sale, while Version B also shows the price per liter next to the package price. Visitors can be randomly assigned to either version, with the version saved for each visitor so repeat visits remain consistent.

In a physical store, you can compare two similar locations or alternate the displays on comparable days. This method has more limitations: results can change because of customer traffic, salesperson performance, or local events. Keep a record of the conditions for each period.

1. The owner defines one change for the hypothetical comparison, such as adding the price per liter, and checks how sales and the number of questions about package differences change.
2. Before starting, the owner chooses which measures to use to evaluate the result. For an online store, they can count visitors to the product page and those who buy the product. In either format, they can track units sold, revenue, gross profit, returns, and sales of substitutable products.
3. In this scenario, the responsible employee keeps prices, advertising support, product placement, and discount rules the same for both versions. They record stock changes and interruptions, as these can affect the result.
4. The owner sets the comparison period and reasons for pausing it in advance. A hypothetical initial plan could cover two full weeks, with a pricing error or product unavailability serving as grounds for a pause. If there are few purchases, the owner does not draw a firm conclusion simply because the period has ended.
5. After the comparison, the owner assesses all selected measures: they check total gross profit for the category, the number of returns, and sales of similar products. This helps determine whether the category’s results improved or customers simply switched from one product to another.

For example, in a fully hypothetical result, 500 visitors saw Version A, and 25 bought the product: a conversion rate of 5%. Another 500 visitors saw Version B, and 30 bought the product: a conversion rate of 6%. The difference is one percentage point, or 20% of the original 5%. These figures alone do not prove that the additional line caused the change; random variation and the comparison conditions also need to be considered.

Official source for requirements on discount announcements

Law of Ukraine “On Protection of Consumer Rights” No. 1023-XII, Article 15, parts 4–6: terms for discounts and sales, and informing customers of prices.