Compounding Discounts and Profit Risk

Compounding discounts occur when multiple discounts are applied sequentially to the same sale, rather than selecting a single best discount. For example, a promotional price is applied first, and then an additional percentage discount (such as a loyalty or staff discount) is taken off that already-reduced price.

While this can appear attractive to customers, it exposes a company to uncontrolled and often unnoticed profit erosion. When multiple promotions overlap such as multi-buys, category specials, loyalty discounts, staff discounts, or time-based promotions, the combined effect can significantly reduce margins beyond what was ever intended. Over time, this can lead to inconsistent pricing, margin leakage, and inaccurate reporting on the true cost of promotions.


In practical terms, compounding discounts make it very difficult to:


  • Predict promotional impact on gross profit
  • Ensure consistent pricing at the till
  • Accurately report on promotion performance
  • Maintain disciplined margin control

The “Best Price” Model Used by Ramsys

Ramsys does not compound discounts. Instead, it uses a Best Price calculation model.

At the point of sale, Ramsys evaluates all applicable pricing rules and promotions simultaneously, then automatically applies the single lowest valid price for the customer. This ensures the customer receives the best available deal, while protecting the business from unintended double-discounting.

Example: Multi-buy vs Gold Card Discount

  • Promotion: 3 × Swirls for $24.99 a percentage discount 7.44%
  • Gold Card discount: 10%

When a customer purchases 3 Swirls:

  • Ramsys compares the multi-buy price ($24.99) against the discounted price.
  • If the sale is a Gold Card sale, Ramsys then compares:
    • Full price $27.00
    • Multi-buy promotion price $24.99
    • 10% off the regular price equivalent


Ramsys automatically determines that $27.00 less 10% = $24.30 is the best valid price and charges $24.30.
No discounts are stacked blindly; the system simply selects the most favourable outcome.

Consistent Pricing Across All Scenarios

This Best Price logic applies universally across Ramsys, including:


  • Promotional pricing
  • Gold Card / Docket / loyalty discounts
  • Staff pricing
  • Special offers and campaigns

For example, if a product is on promotion at a lower price than the staff discount would produce, the staff member automatically receives the promotional price, not a compounded discount.

Managing Complexity Safely

Yes, promotion pricing can become complex, particularly where promotions overlap, Ramsys includes an extremely powerful promotions and price management module designed specifically to handle these scenarios. It calculates the optimal price seamlessly and in real time, without requiring staff intervention at the till.

The result is:

  • Simple, consistent pricing for stock sales.
  • Best possible price for the customer.
  • Full control over margins.
  • Accurate reporting and stock control.


This approach ensures promotional flexibility without sacrificing commercial discipline.