---
title: 5.X The Math of a Discount
description: "## 5.X -- The Math of a Discount You want to know what discounting actually costs you? Do the math. At a 30% gross profit margin -- a reasonable baseline for most independent operators -- here is what you need…"
url: "https://kb.jeffreysummers.com/docs/5-x-the-math-of-a-discount/"
updated: "2026-08-28"
category: Profit / Profit Book
---

# 5.X The Math of a Discount

## 5.X -- The Math of a Discount

You want to know what discounting actually costs you? Do the math.

At a 30% gross profit margin -- a reasonable baseline for most independent operators -- here is what you need to sell to recover the gross profit you gave away:

A 25% discount requires 600% more volume to recover the same gross profit you started with.

Doesn't that give you a headache?

This isn't theory. This is arithmetic. Every discount is a permanent, unrecoverable loss of revenue that you are betting volume will replace. Volume that has to come from somewhere. Volume that has to show up consistently, not once. Volume that, at a 25% discount, would need to be six times your current sales just to get back to where you started.

You don't have a marketing problem. You have a math problem. And the math doesn't care how many people came through the door.

The **[Lost Opportunity Tax]** on a discount is not hypothetical -- it is the exact dollar amount of margin you surrendered on every cover sold at the reduced price. It does not compound in your favor. It compounds against you -- because the guest who came in for the discount expects the discount next time. You didn't buy loyalty. You bought a transaction. And you paid for it out of your own margin.

Qualifier: these figures use a 30% gross profit margin as an illustrative baseline. Your actual margin will vary by concept, category, and cost structure. Run your own numbers. The ratios will shift -- the argument won't.