A discount that requires shoppers to meet a costly condition can reduce total sales of the promoted product, according to research in the Journal of Marketing Research.
Across five studies, Andong Cheng and Ashley Stadler Blank found that a large discount paired with a demanding eligibility condition was most likely to produce fewer sales than offering no promotion. Their work, published in 2025, was examined in an American Marketing Association review this year.
The result gives retailers a reason to measure all sales of an item during a promotion, including purchases at its regular price, instead of counting only customers who redeem the deal.
When a deal becomes a barrier
A conditional promotion offers a discount only when the buyer meets a requirement. A customer might have to purchase several units, join a loyalty program or agree to a service contract.
Those requirements can make commercial sense. A larger order may lower delivery costs per item, while a membership program can give a retailer a continuing relationship with a customer. But an offer that appears generous to an eligible buyer may be unattractive to someone who cannot or does not want to meet its terms.
In the published research, the authors argue that a demanding condition can deter purchases at the discounted price. At the same time, seeing a large advertised discount can make paying the regular price less appealing.
A hypothetical store that offers a steep saving only when customers buy six items might gain bulk buyers but lose shoppers who need one. The result depends on how many customers fall into each group; the example is not a reported experiment.
Counting the whole result
The studies include field and laboratory evidence. They identify circumstances in which the promoted product can sell less overall, not proof that every loyalty offer or volume discount will fail.
Retailers can compare total unit sales, revenue and gross margin with a comparable period or a group of stores that does not run the promotion. Stock availability, competing campaigns and seasonal demand also need to be considered before attributing a difference to the offer.
Margin matters because extra units sold at a deep discount may leave less money after product and fulfillment costs. Conversely, a promotion could support a longer customer relationship even when the first transaction is less profitable, although that benefit has to be measured over time.
Our earlier reporting on how grocery price displays affect buying decisions examined another way the presentation of an offer can influence customers without changing the product itself.
For shoppers, the advertised saving is only one part of the calculation. The full cost of meeting the requirement, including unwanted extra purchases or a longer contract, determines whether the deal is attractive to them.
