How 50 Percent Discounts Really Work

by Kelli B. Grant
Thursday, October 28, 2010

Looking for a good deal? How's 50% off sound? Once a bargain-basement super-deal, getting half-off is now about what shoppers can -- and should -- expect from a sale, experts say. And in preparation for the holiday rush, stores have figured out how to give it to them and still turn a profit.

Markdowns have already approached that level in toys and electronics, which account for much of holiday spending, says Alison Paul, leader of the retail practice for Deloitte Apparel. Household goods and small appliances are also likely to hit that magic mark by Black Friday. "If the price is already 50% off, take it and take it now," says Jeff Green, who runs a retail consulting firm.

Although half-off may seem like a boon to consumers, retailers are still profiting, says Adrienne Tennant, a retail analyst at investment bank Janney Montgomery Scott. These deep and temporary markdowns are essentially loss-leaders, designed to lure shoppers into buying more items in one visit -- or to generate more visits from shoppers wise to the strategy of rotating discounts. "[Consumers] have traditionally been quite motivated by sales because we understand that means 'here today and gone tomorrow,'" says Kit Yarrow, a professor of psychology and marketing at Golden Gate University in San Francisco. But in the store, a deal for the shopper becomes an opportunity for the retailer to up-sell.

One thing stores can't do to make their deals look good: inflate prices. It's illegal for stores selling other companies' products (such as Sears (Nasdaq: SHLD - News) or Best Buy (NYSE: BBY - News) to set prices above those of the manufacturer, says Gloria Barczak, a professor of marketing at Northeastern University in Boston. Single-brand stores like Gap (NYSE: GPS - News) or Ann Taylor (NYSE: ANN - News) can pull a price switch but rarely do -- and experts say it's ineffective. Loyal shoppers are quick to spot price or quality changes and won't buy or will look elsewhere, Barczak says.

There are three big ways retailers are able to give you that 50% off -- and maintain their profit margins. But savvy shoppers can separate the real values from the deals designed to get you to mindlessly hand over your credit card.

Sales-Cycle Lows

Stores rotate which categories and brands go on sale each week, and the depth of the discount changes over the course of a month, too. To figure out when your favorite store offers its best deals, sign up for its email list. Then scan them over the next 30 days -- you'll quickly get a sense of the highs and lows, and how often the best discounts crop up. Borders (NYSE: BGP - News), for example, usually offers weekly deals for 33% off the regular price of one item of your choice, but hands out a 40% off coupon at least once a month. Figure out when and time your purchase to that week.

Limited-Time Deals

Keeping sales limited to a tight window is another easy way for stores to offer the big discounts shoppers want, or to create a shopping frenzy, a la Black Friday, says Barczak. At the regular Saturday "one-day sales" at Macy's (NYSE: M - News), there are deeper discounts until 11 a.m., then lesser deals that continue until closing. The 40%-off sales at Gap have also been limited to single days this fall. That creates a powerful psychological incentive, says Yarrow. "That fear of missing out is giant in the minds of consumers." In return, the store gets a rush of customers who are likely to put full-priced items in their baskets, too.

Shipping Charges

Even a big online discount can be offset if you pay the full price for shipping charges. Lee Jeans recently offered 50% off all online jeans orders, but someone buying one pair on sale for $21 would still pay $5.95 for shipping, which in effect reduced the discount to 36%. Some merchants will offer a big discount and free shipping together this holiday season, but not with regularity until the Monday after Thanksgiving, when people do more holiday shopping online.

The facts about removing odor from the fridge

By Brian Clark Howard

The nontoxic, natural cleaning powers of baking soda have been known for generations, and many people leave a box of the stuff in their refrigerator to try to fight odors. But many of us aren't using it correctly. There are some things you should know about how baking soda works to get real results and the best value for your money.

Baking soda, which is really 100% sodium bicarbonate, eliminates odors by neutralizing strong acids and stabilizing strong bases – the root causes of most bad odors.

According to Leslie Stein of the Monell Chemical Senses Center in Philadelphia, there aren't any real-world studies that prove the odor-eating effectiveness of baking soda, but there are reams of anecdotal evidence and lessons from the lab.

To get the most out of baking soda, follow these three guidelines.
1. Replace it often

Most of us leave an open box of baking soda in the fridge for months, if not years. But experts recommend changing out a fresh box every one to three months.

Baking soda neutralizes odors by turning them into inert crystalline salts, according to Ray Brown, a research and development scientist with Church & Dwight, the company that makes Arm & Hammer. Over time, the salts build up (that's the crust that develops on the top) and baking soda loses its effectiveness. Brown says the odors work their way through the box, and stirring it up doesn't really help.

After its odor-fighting ability is exhausted, the used baking soda will still have enough power to use for cleaning counters, trash cans, or drains, Brown says, but don't use it for baking or personal care.
2. Open the box in the right location

It's critical that the baking soda powder actually come in contact with the odors. Tear off the box top, and make sure that airflow around the baking soda isn't restricted by a shelf or other items in the refrigerator.

The best bet is to place an open box as close as possible to the refrigerator's fan.

"Baking soda is not like a fragrance, which goes into the air to cover up odors," says Brown. "Baking soda reacts with the bad odors. When the fridge door is closed, air is circulating past the baking soda, and odors are continually removed."
3. Use the right tool for the job

If baking soda isn't working on a tough odor, or if you want to get rid of all odors, including chemically neutral ones like fruity or floral scents, try activated carbon (sometimes called activated charcoal). This material is treated to make it extremely porous, like a sponge for the air, so it can absorb a large amount of odor – but it still must be replaced.

Activated carbon is used in water filters, shoe inserts, cat litter, and fish tanks, and can be purchased at pet stores or ordered online. The downside? It's not as widely available as baking soda, and it costs more (about five times as much, per pound.) So most of the time, you'll be better off sticking with baking soda.