Your company used to charge $120 for a graphic calculator but offered a $20 rebate. For back-to-school promotions this year, your team decided to sell the same calculator for $100. Your team is shocked that sales went down. How could you use your knowledge of mental accounting to explain a possible cause for the reduction in sales?


Absolutely! Customers feel better when a loss is paired with a gain. In last year’s promotion, the price of the calculator started higher at $120 but was paired with a gain in the form of a $20 rebate. Customers like that feeling of getting a deal more than they like paying the same price of $100 for the calculator when it doesn’t have a rebate offer.

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