2.11 Marketing Math Objective: Process the sale to complete the exchange.

Making Change  Simple Math!  Subtraction  Bill Total = $18.95  Customer has $20.00  How Much Change?

Extensions  Multiplication  Multiply the number of units by the price per unit  12 Cans of Soda  $0.50 per can  12 x $0.50 = $6.00

John Smith 7150 E. 24 th Street Yuma, AZ /08/ Halters Belts Pair of Boots Shirts $ $89.95 $73.90 $ $ $ Extensions and Subtotal

 Methods of payment for a sale  Cash or check Sales  Credit Card  Debit Card  Layaway  On Approval  Cash On Delivery

Cash or Check 23% of sales are cash 4.3% of sales are check Cash is King: Some stores will not accept checks All stores have check policies License or ID Phone Number Bounced check charges

Credit Card vs. Debit Card  Debit Card:  Cheaper than Credit Card  Flat Rate of $0.59  Faster than Check  Money is transferred immediately  Some offer debit card discount

Credit Card vs. Debit Card  Credit Card  Businesses pay a credit card fee  1.79% to 3.25% of the transaction  Stores may set charging limits

Other Methods of Payment  Cash-on-Delivery : (COD)  Ex: Pizza Delivery  Lay-Away:  Merchandise removed from stock  Customer leaves a deposit and makes payments  Merchandise received when paid off  On Approval:  Customer takes merchandise on store credit

Charges Affecting the Sale  Discounts  Allowances  Sales Tax  Shipping Charges

Discounts  Reduction in sales prices  Calculated before sales tax  Special Sales  Coupons  Customer Loyalty Discounts  Group Discounts  Bulk Sales Discounts

Calculating the Discount  $30 item with a 22% discount  Multiply price by the discount percentage  $30 x 22% = $6.60 (Total Discount)  Subtract the total discount from the price  $30 - $6.60 = $23.40

Allowances  A partial return of the sales price  Usually occurs when merchandise is defective  Calculated Like a Discount

Sales Tax  Sales Tax: A percentage fee placed by the government on the sale of goods and services.  Sales Taxes are different per state and county  Alaska, New Hampshire, Delaware, & Oregon = 0%  Arizona is highest: 11.75%  North Carolina =  Mecklenburg County =

Calculating Sales Tax  Multiply subtotal by the sales tax rate  $25 x 7.25% = $1.81  Add sales tax to the subtotal for sale total  $25 + $1.81 = $26.81

John Smith 7150 E. 24 th Street Yuma, AZ /08/ Halters Belts Pair of Boots Shirts $ $89.95 $73.90 $ $ $ $31.66 $ $ $31.66 $ % $ *.066 $31.66 Bill total with tax included

Shipping Charges  Charges for delivery of a product  Shipping charges are not subject to tax.  Shipping Charges are often paid by the consumer.  Shipping charges are calculated based on:  Weight  Item Price  Geographic Zones  Length of time to deliver  Combination of 2 or more

Shipping  Shipping charges are not subject to tax.  Shipping Charges are often paid by the consumer.  Shipping charges are calculated based on:  Weight  Item Price  Geographic Zones  Combination of 2 or more

How do charges and discounts affect the price of purchases?  Increase the cost of items  Cover credit card charges and frequent discounts  Retailers pass the charges or discount down to the customer  As an additional charge  Raise the original price of the item

After the Transaction  Returns  Merchandise brought back for a cash refund or credit  Full payment returned  Exchanges  Merchandise returned for something else  Even exchange: occurs when an item is exchanged for the exact same thing  Uneven Exchange: money may be owed or returned  Some stores only offer in-store credit & not cash back

Technology in calculations  Speeds up process  No “in your head” or hand calculations  POS (point of sale)  Computer make all of the calculations  Less time taken to double check figures.