I ran a simple errand today: I needed to get a wallet and drove to my local department store. I expected to pay about $30 and get something that will last a few years. As I walked up to the Macy’s at the University Town Center I saw there was a table near the entrance. Fortunately it wasn’t someone looking for my support for a candidate or ballot measure: it was the Susan G. Komen Race for the Cure and they were collecting money to end breast cancer. I cheerfully gave them $5.00 and I was given a coupon that I could use at the store. Here is a copy of the coupon:

I know it’s hard to read, but bear with me (I’m sure there was no intent to make it confusing). The coupon grants discounts of 10%, 20%, or 25% depending on what you buy. I intended to buy a man’s wallet. The discount would be 25% if it was a “single regular, sale or clearance fashion item for the entire family including accessories, plus selections for your home.” The discount would be 20% if I’m buying a “sale & clearance and select regular priced women’s [sic], men’s [sic] and kids’ apparel and accessories, fine and fashion jewelry, frames, bed & bath items, housewares, luggage, and china.” The 10% discount appears to apply only for “all sale & clearance and select regular-priced furniture, mattresses, area rugs, electrics and electronics.” Any idea where my wallet fits? Me neither.

I walked into the store and found the mens’ wallet display. There were three tables: one table announced that everything on the table is on sale for 20% off. The second table had a sign that all wallets there were 30% off. The third table had a sign that was covered up. You make the call. As you might expect, my first question was whether I could combine the two discounts: the sale price on the wallet and the coupon. I found a suitable wallet (manufactured by Geoffrey Beane if that matters to you). The list price was $36, the upper level of what I wanted to pay. But wait: it’s on the 30% off table and I have a coupon for either 20% or 25%. How much is the wallet now? Good question. The first salesperson I asked read the coupon and said that I have to have a Macy’s credit card to use the coupon. I asked where he sees that on the coupon and he called another salesperson over. This person seemed to think I could combine the two, but he wasn’t sure (that’s what the cash register was for). We walked over to the cash register and he suggested that I apply for a Macy’s credit card which would give me an additional 25% off of this purchase. That would have been fun, but I declined. At this point I’m still not sure what I’m going to pay.

OK, drum roll: the 2nd salesperson rang me up and the total price was $21.92. I can’t complain, and I bought the wallet. Now, here’s the question: how did it go from $36 to $21.92? I started writing the Money Chronicles because of experiences like this. We’re often bombarded by offers of discounts and sales, and more often than not we have no idea how much we’re going to pay. The 30% off table looked enticing, and being able to save an additional 10%, 20%, or 25% sounded even better. But neither I nor the cashier knew how much I would be charged until the cash register told us.

One thing I knew right away was that I wouldn’t get 55% off (30% plus 25%). But let’s start with the 30%. The list price of the wallet was $36.00 and 30% of that is $10.80. Subtract the $10.80 and the wallet should be $25.20. So far so good. Now for the second part: it appears that my wallet is catagorized as “sale & clearance and select regular priced women’s [sic], men’s [sic] and kids’ apparel and accessories, fine and fashion jewelry, frames, bed & bath items, housewares, luggage, and china” as I was given the 20% discount. I guess the wallet is an accessory. Too bad it doesn’t qualify as “for the entire family” as I would have gotten 25% off. In any case, I got 20% off the $25.20. That’s $5.04, bringing the total down to $20.16. Add the 8.75% sales tax of $1.76 and it brings the total to $21.92.

In the end, I was discounted $14.08, which was 39%. But I wonder how many people would have thought I’d have gotten 50% off (30% plus 20%). Each discount made the next one less valuable, and I have to wonder this: if I had applied for a Macy’s credit card, where would that discount have come? I’m guessing it would have been after the 30% and before the 20%. That being the case, it would have gone like this: Start with $36.00, minus the 30% ($25.20). Now take the credit card 25% ($6.30) and that gets me down to $18.90. Now the 20% coupon gives me another $3.78 off, bringing the total down to $15.12. Add on sales tax and we’re back up to $16.44. It gives me a new credit card with (likely) a high interest rate, and it would have saved me $5.48. Doing the math makes it seem less valuable.