DISCOUNTS, DEALS AND THE RETAIL ILLUSION

 

BIZ MASALA  |  SUNDAY SPECIALS

DISCOUNTS, DEALS AND THE RETAIL ILLUSION

Are shoppers saving money—or being persuaded to spend more?

By Murthy ASR  |  Biz Masala

Original editorial image: shoppers comparing products amid a dense retail sale environment.

THE DISCOUNT IS A CLAIM. THE BILL IS THE EVIDENCE.

A red ‘70% OFF’ sign feels like information. It can also become an anchor: shoppers judge the offer against the displayed original price rather than against what the same product normally sells for, what competitors charge, or whether the purchase was needed at all. The right question is not how large the percentage looks. It is how much the buyer pays for a product of comparable quality, including every condition and fee.

This is not a claim that all discounts are fake. Retailers use genuine promotions to clear inventory, attract customers, introduce products, reward loyalty and compete. The forensic task is to separate a real price reduction from a reference-price illusion, a conditional offer that expands the basket, or a checkout total that is higher than the headline suggested.

THE ₹10,000 TAG: A SIMPLE TEST

Suppose a product is displayed at ₹10,000 with a 30% discount, bringing the offer to ₹7,000. The arithmetic is correct relative to that reference price. But if the same product has recently been available from credible sellers for ₹8,000, the shopper’s saving against that comparison is ₹1,000, not ₹3,000. A valid comparison needs the same model, warranty, seller conditions, delivery, exchange assumptions and time period.

Illustrative price comparison—not evidence about a particular retailer or product.

THE PROMOTION MAY CHANGE THE BASKET

Discounts can change not only which product a consumer buys, but when they buy it, how much they buy, and whether they switch brands. An Indian empirical study of sales promotions found that promotions were associated with brand switching, stockpiling and purchase acceleration rather than necessarily expanding the overall product category. That distinction matters: a sale can move spending between brands or pull a future purchase into today without creating a lasting consumer benefit.

Threshold offers are another example. ‘Save ₹500 on orders above ₹5,000’ can be attractive if the buyer already planned to spend ₹5,000. It is less attractive if the buyer adds unneeded products to cross the threshold. Research using Indian retail experiments has found that conditional promotions can encourage shoppers to add items to reach a threshold, with responses shaped by payment method, how far the basket is from the threshold and the kind of items already in it.

A decision chain that separates the headline claim from the final consumer outcome.

Illustrative basket arithmetic: a lower unit price does not guarantee a lower total spend.

THE HIDDEN PRICE: FEES, TERMS AND EXCHANGE CONDITIONS

A promotion may be conditional on a bank card, minimum cart value, exchange of an old device, a particular payment method, a membership fee or a limited seller selection. Delivery, installation, platform fees or optional add-ons can also affect the final cost. Some conditions are legitimate and clearly disclosed; the consumer problem arises when material terms are hard to find, change late in the journey, or make the headline price misleading.

India’s Consumer Protection Authority issued the Guidelines for Prevention and Regulation of Dark Patterns in 2023, identifying 13 specified practices. These include false urgency, basket sneaking, bait and switch, drip pricing, disguised advertising and interface interference. The guidelines address manipulative design practices; they do not mean that every countdown clock, add-on or discount is automatically illegal. The facts and implementation matter.

THE PSYCHOLOGY OF THE REFERENCE PRICE

Consumers rarely have perfect price information. A displayed ‘was’ price can shape expectations, and repeated exposure to promotions can shift a shopper’s internal idea of what a product should cost. Academic research on price promotions has documented this reference-price effect. It helps explain why a discount can feel valuable even when the buyer has no reliable baseline for the product.

The practical response is to create a reference price independently. Check the exact model number; compare at least two or three sellers; look at price history where reliable data exist; distinguish a manufacturer’s maximum retail price from the price commonly paid; and compare the final checkout amount rather than the banner.

SHRINKFLATION: WHEN THE PRICE STAYS PUT

The discount story also has a quieter counterpart: the package that costs the same but contains less. Financial Express reported in October 2026 that some consumer-goods companies were reducing pack sizes by around 2–7% for selected products while maintaining familiar price points, alongside selective price increases. These are reported examples, not a claim that every brand or pack has changed. For shoppers, the useful comparison is price per gram, litre, unit or use—not only the sticker price.

A SHOPPER’S FORENSIC CHECKLIST

·       Record the exact model, pack size, quantity, warranty and seller—not just the brand.

·       Compare the offer with recent prices for the same item from credible sellers.

·       Calculate the final checkout price after shipping, installation, fees and required memberships.

·       Check whether the bank offer is instant, a later cashback, or limited by caps and eligibility.

·       Do not add items merely to cross a threshold unless you genuinely need them.

·       Compare unit price when pack sizes differ; a stable sticker price may hide less product.

·       Treat countdowns and ‘only two left’ claims as prompts to verify, not reasons to rush.

·       Save the product page, invoice and offer terms if a claim appears misleading.

WHAT SHOULD REGULATORS AND PLATFORMS DISCLOSE?

A meaningful discount label should let consumers understand the reference price, the time and conditions attached to the offer, the final payable amount, and any material exclusions. Platforms should make sponsored placement distinguishable from organic ranking and present the total price before the consumer commits. Regulators, meanwhile, need evidence-based enforcement: preserve screenshots, compare identical products over time, and distinguish deceptive representations from ordinary dynamic pricing.

BIZ MASALA VIEW | SHOP THE PRICE, NOT THE PERCENTAGE

The retail sale is a competition for attention as much as a competition on price. Genuine discounts can benefit shoppers and help sellers manage inventory. But a percentage printed in red does not prove that a bargain exists. A purchase can be cheaper per item yet more expensive overall; a discount can be real but unnecessary; a stable price can conceal a smaller pack.

The most useful consumer habit is to reverse the order of the decision: first decide what is needed, then establish a fair comparison price, then calculate the final bill, and only then judge the offer. The best discount is not the largest number on the banner. It is the lowest credible total cost for the product the buyer actually intended to purchase.

REPORTING NOTE & METHODOLOGY

This is a desk-based analytical feature using official Indian consumer-protection guidance, academic research on price promotions, and recent reporting on festive-season pricing and pack-size changes. All price and basket graphics in this article are illustrative examples created for explanation; they are not observed transactions or accusations against a specific retailer.

SOURCES & FURTHER READING

1.       1. Press Information Bureau / CCPA, “Guidelines for Prevention and Regulation of Dark Patterns, 2023” (8 December 2023). https://pib.gov.in/PressReleasePage.aspx?PRID=1983994

2.       2. Press Information Bureau / CCPA, “Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022” (10 June 2022). https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1832906&lang=2&reg=48

3.       3. Mittal & Sethi (2011), “The Effectiveness of Sales Promotion Tools among Indian Consumers: An Empirical Study,” Journal of Promotion Management. https://doi.org/10.1080/10496491.2011.580693

4.       4. Consumer’s response to conditional promotions in retailing: An empirical inquiry, Journal of Business Research (2022/2023 publication record). https://www.sciencedirect.com/science/article/pii/S0148296322001709

5.       5. Hawaldar et al., “Trapping fake discounts as drivers of real revenues and their impact on consumer's behavior in India: A case study.” https://researcher.manipal.edu/en/publications/trapping-fake-discounts-as-drivers-of-real-revenues-and-their-imp/

6.       6. Financial Express, “FMCG firms balance inflation, festive demand with calibrated price hikes” (October 2026). https://www.financialexpress.com/business/news-fmcg-firms-balance-inflation-festive-demand-with-calibrated-price-hikes-4354350/

7.       7. Financial Express, “Festive sales face a discount squeeze” (October 2026). https://www.financialexpress.com/business/industry-festive-sales-face-a-discount-squeeze-4356932/

EDITORIAL CAVEAT

The examples in the graphics are hypothetical. Academic findings have sample and context limitations and should not be treated as proof about every consumer or retailer. The article does not allege that a named company has used misleading discounts; any case-specific conclusion would require product-level price histories, offer terms and evidence.

BIZ MASALA | THE BOTTOM LINE

— Murthy ASR

BIZ MASALA

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