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Dining Promotions: 1-for-1 or 50% Off – Which Is Better?

1-for-1 and 50% off are not the same thing.

 

When dining out, you are sometimes presented with the choice to utilise either a 1-for-1 promotion or apply a 50% off discount. Are both of them the same thing? Well, they’re not!

This article will explain the difference so you can optimise your orders to make the best use of each promotion, or make the smart choice when deciding between them.

While we used a restaurant meal as examples in this article, the same principle applies to other promotions such as 2-for-the-price-of-1 clothing sales as well.

Read Also: How Should Starbucks One-For-One Discounts Be Shared?

1-for-1 vs 50% Off

When you use a 1-for-1 promotion, you’re essentially paying the full price for 1 item, and getting another 1 ‘free’.

The obvious drawback is that even if you get to choose what ‘free’ meal to get, the optimal decision is for the second item to be equal in price. The not-so-obvious benefit is that you will only be paying the GST and service charge for one meal, since the second meal is ‘free’ and the taxes can only be levied on the first meal.

In the case of 50% off, the price of menu items you ordered will be added up, and then a 50% discount is applied to it.

Any GST and taxes will then be added back into your final bill. As you probably already know, a 50% off deal allows you more flexibility in ordering different menu items, possibly with wildly varying prices. However, you will be paying slightly more in GST and taxes, as compared to a 1-for-1 type of deal.

Here are two examples to illustrate.

[Update: Readers have highlighted that IRAS requires companies to levy GST on the net price, after discounts. We’ve amended the examples to reflect this.]

Example 1 – Ordering Two Same-Price Items:

1-for 1:

Pretentious Organic Truffle with Hand-Picked Avocado on Toast: $30
Pretentious Organic Truffle with Hand-Picked Avocado on Toast: (Free)
Sub-total: $30

10% Service Charge on $30: $3
7% GST on $33: $2.31
Total: $35.31

50% Off:

Pretentious Organic Truffle with Hand-Picked Avocado on Toast: $30
Pretentious Organic Truffle with Hand-Picked Avocado on Toast: $30
Sub-total: $60

50% Off on $60: -$30
10% Service Charge on $60: $6
7% GST on $36: $2.52
Total: $38.52

That’s quite a difference in price among two promotions that appear to be equivalent on the surface!

Example 2 – Ordering Two Differently Priced Items:

1-for 1:

Pretentious Organic Truffle with Hand-Picked Avocado on Toast: $30
Atas Smoked Biscuit with Special Sauce: (Free)
Sub-total: $30

10% Service Charge on $30: $3
7% GST on $33: $2.31
Total: $35.31

50% Off:

Pretentious Organic Truffle with Hand-Picked Avocado on Toast: $30
Atas Smoked Biscuit with Special Sauce: $6
Sub-total: $36

50% Off on $36: -$18
10% Service Charge on $36: $3.60
7% GST on $21.60: $1.51
Total: $23.11

In this scenario where both food items vary (substantially) in price, using a 50% is clearly the smart thing to do.

Make the Decision Before You Order

In case you haven’t realised it by now, if you want to get the best bang for your buck, you need to optimise your orders for each type of promotion. And that means making the decision before you order, and not at the time of payment.

Now you know how to best deploy your discounts and promotions.

This article was written after a DollarsAndSense reader Joyce wrote to us and shared her personal experience. If you have any comments or thoughts, we’d love to hear from you at the DollarsAndSense Facebook page!

Read Also: Why Does Iced Coffee Always Cost More?

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