Using “ Gift” Instead of “ Discount”

[Lilyann]

I am in a retail store ( vendor mall). There are about 60 individual  vendors in this store. The owner wants to put our discounted items ( when we have a sale) in the category of “gift” instead of using “ discount”. What is the benefit to owner to use gift field/option instead of the discount field option? 

[JK_Fiber_Art]

I believe the benefit to the owner is that he or she will increase their total sales.  In most pricing policy situations, customers think free gifts are better than discounts.   Discounts are common marketing go-to's for many businesses but, offering a gift transforms a transaction into a happy experience.  How that affects your bottom line depends on what arrangement you have with the owner - you may also benefit from additional sales of your items.   Let's say you have an item for $100 but, you're offering a 15% discount so the item now costs $85 ($100 x 15% = $15).   Now you have another item that costs $9 - instead of the 15% discount, you give the customer the $9 item for free if they buy the $100 item.  So instead of you getting the $85, you're now getting $91.  The customer thinks they are getting a deal and you get more money than offering the discount.  You both win.