Stop cutting your profit margin like crazy as a method for this Black Friday 2025 season. When BFCM season rolls around, many merchants’ first instinct is: “Let’s slash prices!”
But have you ever wondered how a modest 10% discount can eat into your profit?
Take a look at this table:
Source: GrowthForce’s article How Discounting Can Destroy Your Business Profits
Based on GrowthForce’s article “How Discounting Can Destroy Your Business Profits,” you can see how aggressive discounting may shrink your bottom line faster than you think.
To be clearer, this table says that if your current selling product has a 40% gross margin, then a 20% discount means you need 100% more sales (double!) to make the same profit as before.
Many merchants slash prices every BFCM, hoping to win more orders – but without a strategy, discounts eat profits faster than they attract customers.
Estimate the impact of your promo with our discount calculator 👇
💰 Discount Impact Calculator
TL;DR: BFCM Discount Psychology in 60 Seconds
Discounts can grow sales – or destroy profits. Here’s your quick skim-friendly cheat sheet before we dive deep:
- Discounts are tools, not crutches. Used right, they drive urgency, loyalty, and bigger carts. Used wrong, they gut your profits.
- 7 Core BFCM Discount Psychological rules:
- Rule of 100: % discounts work best under $100, $-off discounts win over $100.
- Anchoring Effect: Show the original price first so the deal feels bigger.
- Decoy Effect: Add a “medium” option to make your target product look like the smartest buy.
- 99 Effect (Charm Pricing): $49.99 feels way cheaper than $50 – use left-digit bias to your advantage.
- Scarcity & Urgency: “Only 5 left” + countdown timers = instant FOMO.
- Reciprocity: Give first (BOGO, free gift, sample) and customers feel pulled to give back.
- Protecting Perceived Value: Use exclusivity, bundles, and value-adds to keep your brand premium without racing to the bottom.
- Smart BFCM Discount Types
- Percentage vs. dollar-off deals (based on Rule of 100)
- Tiered “buy more, save more” pricing
- Free shipping thresholds
- Bundles & BOGOs
- Exclusive, invite-only, or early access offers
- Shopify Pro Tip: Themes like Eurus on Shopify make setting up discounts visually appealing and conversion-friendly.
The Psychology Behind Discounts (And How to Use Them)
Discounts aren’t just numbers – they’re psychological triggers. If you get the psychology right, you’ll sell more and protect your margin.
Psychology Rule #1: The Rule of 100
Appeared in the book Contagious by Jonah Berger with the question “What makes something seem like a good deal?”, we heard the concept of The Rule of 100, which explains the true purpose of a discount and how to maximize its power.
🧐 What it is:
The Rule of 100 says:
- If a product’s price is under $100, show percentage discounts (e.g., 20% off).
- If a product’s price is over $100, show absolute dollar discounts (e.g., $50 off).
✏️ Example:
For a $30 product:
- Option 1: 20% off $30
- Option 2: $6 off $30
⇒ Same value, but 20% off (option 1) looks sexier than $6 off.
For a $300 product:
- Option 1: $50 off $300
- Option 2: 17% off $300
$50 off feels bigger than 17% off, even though it’s not, tricky, very tricky.
🤔 Why it works:
People are too lazy to do real math, especially during the Black Friday rush, but are great at feeling value.
💡 Best discount types for this rule:
On Shopify, you can easily launch both Percentage Discounts and Dollar-value discounts by going to Shopify admin > Discount tab > Create discount. If possible, you can highlight these deals on the storefront using the Labels and badge feature that your Shopify Theme supports, or use an extra application.
See more: How to add Shopify Product Labels to your store
Psychology Rule #2: Anchoring effect
You can actually be a “victim” of the anchoring effect more frequently than you think. For sellers, this is a straightforward yet effective discount method.
🧐 What it is:
Basically, this psychology says that the first piece of information you see becomes your mental “reference point”. They might rely on that first price to make further decisions in the long run.
✏️ Example:
Put a higher price at first, then show a lower price
Let’s say you sell a premium skincare kit.
- Option A: Show only the discounted price: $79
- Option B: Show “WAS $120, NOW $79”
Option B will almost always convert better because the anchor ($120) makes $79 look more appealing.
There are many different approaches to this anchoring effect. If you want to deep dive, take a look at this useful blog post from Insidebe about 12 Examples of Anchoring Bias.
🤔 Why it works:
Humans don’t have the instinct to judge value in isolation. Instead, we compare. The first number we see sets the “anchor,” and every price after that feels cheaper or more expensive relative to it. If the anchor is high, the discount feels irresistible – even if the final price isn’t that much of a bargain.
💡 Best discount types for this rule:
- Strikethrough Pricing: Show original price, then discounted price (classic anchor). In Shopify, you can easily create this type of discount using the “Compare at” setting while setting up the products’ prices.
- Limit the purchase: For each buyer/ account, he/she can only buy a limited number of products. Set a high anchor for the acceptable products; this can help boost a higher average order value (as proved in the research from Wansink, Kent, and Hoch). Plus, this prevents the first few people from sweeping all the deals and leaving nothing for the ones behind.
Psychology Rule #3: Decoy effect
This psychological rule is similar to the Anchoring effect and is often used in the food & beverage industry. And, the Decoy effect explains why we often feel more certain about our choice after a third choice is added.
🧐 What it is:
Decoy effect, also known as the asymmetric dominance effect, says that when you are considering between 2 options, the addition of a 3rd one, which is way less attractive, can have a big influence on your perception of the first two.
✏️ Example:
Imagine you’re buying popcorn at the movies:
- Small: $3
- Large: $7
Most people go for the small. Will you do the same? In a small size, you can save some more money, and the large size may be too big to finish after a 2-hour movie.
But then the cinema introduces a medium popcorn for $6.50.
Suddenly, the large seems like a much better deal – it’s “only” 50 cents more for double the popcorn! You buy the large, and the cinema smiles.
You can see this experiment by National Geographic to see how this scenario happens in real life.
🤔 Why it works:
People rarely know what “fair” value is, so they compare options relative to each other.
The decoy makes one option look clearly better, acting like a small nudge toward the target point.
💡 Best discount types for this rule:
- Tiered Pricing: Offer three packages (Basic, Standard, Premium). Make the middle tier the “star” by placing a slightly worse deal next to it.
- Upsell Encouragement: Show a single product, then add a “just slightly cheaper but worse value” version. This makes the better version feel like the smart choice.
Tip: Be careful of giving too many “nudges”. Otherwise, instead of the Decoy effect, you might trap your customers into the “Paradox of choice” (overwhelming of too many options)
Psychology Rule #4: The 99 effect
This technique is a very famous and often seen method in the e-commerce world, known as the 99 effect.
🧐 What it is:
Prices end in 99 cents or 95 cents instead of rounding up to the nearest dollar.
✏️ Example:
Instead of placing the price as $60, make it $59.99 or $59.95. Amazon is one of the famous e-commerce retailers that uses this strategy frequently.
🤔 Why it works:
This effect happens because people often focus on the leftmost digit of a number (the left-digit effect). Besides, the “charm pricing” – a technique based on the idea that odd numbers are perceived as less arbitrary and more trustworthy than even numbers, also clearly explains the concept behind the 99 effect.
💡 Best discount types for this rule:
- Charm Pricing Discounts: Instead of $50 off → price = $49.99 (feels much cheaper even though it’s just 1 cent).
- Bundle Pricing Ending in .99: Combine products and use charm pricing for the total – e.g., “Bundle for $29.99.”
- BOGO / Quantity Breaks: Frame each unit price with charm pricing to make the “deal math” feel irresistible.
Psychology Rule #5: Scarcity & Urgency (a.k.a. FOMO Fuel)
If you’ve ever panic-bought something because “only 2 left in stock,” you’ve met the Scarcity + Urgency combo.
🧐 What it is:
Scarcity tells the brain, “This is rare.”
Urgency tells the brain, “You’ll miss out if you don’t act right now.”
Put them together and you get FOMO – fear of missing out – which drives instant action.
✏️ Example:
- “Only 5 left, don’t wait!”
- “Early Bird ends in 3 hours!”
- “Flash Sale, Today Only!”
🤔 Why it works:
Humans are loss-averse. Missing out hurts more than gaining feels good. A ticking timer or low-stock label turns browsing into buying.
💡 Best discount types for this rule:
- Flash Sales: Short time windows create urgency.
- Low Stock Alerts: Great for moving inventory fast.
- Doorbuster Deals: Reward early shoppers.
- Early Access Discounts: Give VIPs first dibs (and make non-VIPs want to join your list next time).
Pro Tip: Eurus Theme lets you add countdown timers, progress bars, and low-stock indicators right on your product page, no coding needed.
Psychology Rule #6: Reciprocity
Humans are wired to return favors, even in shopping.
🧐 What it is:
Reciprocity means that when you give something first, customers feel an urge to give back, usually by buying.
✏️ Example:
Offer a free mini sample with an order, and watch customers come back for the full-size product.
Think Costco free samples, they aren’t just nice, they’re powerful sales triggers.
🤔 Why it works:
The Rule of Reciprocity is so deeply embedded in our thoughts. Customers feel they owe you something when you’ve given them value first. It’s a subtle nudge toward loyalty and repeat purchases.
💡 Best discount types for this rule:
- BOGO (Buy One, Get One): The most famous reciprocity deal.
- Free Gift with Purchase: Great for increasing AOV (average order value).
- Loyalty Rewards: Cashback or points they can redeem later, keep them coming back.
Psychology Rule #7: Protecting Perceived Value
If your brand screams “premium,” deep discounts can actually hurt you.
🧐 What it is:
Perceived value is what customers feel your product is worth, and slashing prices can cheapen that image.
✏️ Example:
Luxury brands like Rolex or Louis Vuitton almost never run sitewide sales. Instead, they offer: exclusive private sales to VIPs, complimentary gifts or upgrades, and limited-edition products.
Some brands, such as Hiut Denim Co., even shut their website down during Black Friday.
🤔 Why it works:
High-end customers buy status, not just products. Keeping prices firm protects the brand aura.
💡 Best discount types for this rule:
Don’t limit yourself to thinking that it’s hard to launch a promotion without cutting the prices; there are more choices than you imagine:
- Exclusive Offers: Invite-only discounts keep prestige intact.
- Value-Adds Offers: Free shipping, personalization, extended warranties, for example: “Buy now, free engraving” is a smart tactic.
- Bundles/Upgrades: Create “premium kits” that feel like more value, not a cheaper price.
How to Launch Discounts Effectively with Eurus Theme
Eurus Theme by Omni Themes is the top 3 most famous paid themes for its design and quality on the Shopify Theme Store. To launch different kinds of discounts we talked about before, you might need many different applications.
With only Eurus Theme, you can save time and money finding and setting up tons of apps, and still have a beautiful and effective store for this BFCM season.
Countdown timers:
The countdown timer on Eurus Theme can be used in various positions:
- The Announcement bar (the sticky bar on top) (Theme Editor > Header group > Announcement bar section)
- On the pop-up (Theme Editor > Overlay group > Popup section)
- On the Flash sale section (Theme Editor > Template group > Flash sale section)
- On the Promotion banner section (Theme Editor > Template group > Promotion banner section)
- On the Cart (Theme Editor > Theme Settings > Cart > Countdown timer)
Bundles & Upsells:
Use Eurus’ Product Bundle section to create curated bundles that look polished on mobile and desktop.
Tiered discount messaging:
- Use announcement bars and banners to communicate Day 1/Day 2/Day 3 offers clearly.
- Use the discount progress bar block (Product page > Product information section > Discount progress bar block) to work as a nudge for higher purchases.
- Add a free shipping bar on the cart to motivate customers.
Badges & Labels:
Draw attention to “Best Seller,” “Limited Offer,” or “VIP Only”, shown right on top of the product images, or even on the menu titles.
This helps to highlight the amount in a visually appealing way, making it more standout without overwhelming your customers.
Lowstock reminder:
Showing a bar right on the product page, emphasizing how many items lef,t is a great way to urge customers to buy faster.
Copyable discount codes
Customers can easily see the available discount codes, and with just one click, your customers can easily apply the code. A great way to boost conversion.
If you want to see more ways that Eurus can help bring up the discounts and promotions for your Shopify store, you can explore the demo store.
Plan Smart, Sell Smart
You don’t have to sacrifice profit to win BFCM. Discounts aren’t evil; they just need a strategy. By using the right discount psychology, you can attract more buyers without draining your margins.
Remember:
Discounts are not just math. They’re perception, emotion, and timing.
So this BFCM, make sure to smartly integrate those tactics into your promotion, and when you’re ready to execute: Try Eurus Theme – a premium theme designed to make discount campaigns look great and convert better.
Follow us at OmniThemes.com to learn more about Shopify and get ready to prepare for a mad Black Friday season!
