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www.mipiaci.co.nz-The Pros and Cons of Hiding Discounts Until Checkout: A CRO Perspective

  • nuwanireshinie
  • Nov 11, 2024
  • 4 min read

In today’s highly competitive eCommerce environment, businesses are constantly looking for ways to improve their conversion rates and drive more sales. One strategy that has gained some popularity is offering discounts that are revealed only at checkout, instead of displaying them on the product page. While this approach has its benefits, it can also come with some significant drawbacks when it comes to conversion rate optimization (CRO).


In this article, I’ll explore the potential advantages and disadvantages of this discounting strategy and suggest a way to test both approaches using A/B testing to find out which one works best for your brand.


The Strategy: Hidden Discounts at Checkout


What is it?

The concept behind this strategy is simple: the customer views the full price of a product on the product page. However, the discount or special offer is revealed only when the shopper reaches the checkout page. For example, a 70% discount may appear as a surprise when the customer reviews their total before finalizing the purchase.


Advantages of Hidden Discounts at Checkout


  1. Building Anticipation and Excitement

    • When customers see the full price upfront, but the discount is revealed later, it creates a sense of excitement. This approach can build anticipation, and when the discount is applied, the customer feels like they’re getting a “better deal” than expected. This psychological effect can trigger a sense of satisfaction, leading to a completed purchase.

  2. Reducing Cart Abandonment Due to Sticker Shock

    • Some customers may be deterred from adding a product to their cart if they see the full price upfront, especially if it’s perceived as too expensive. By hiding the discount and showing it only at checkout, businesses can reduce the chance of customers abandoning the cart before they even begin the checkout process.

  3. Focus on Premium Value

    • This strategy allows the product to be presented at its full retail price on the product page, which can give it a more premium or high-value perception. When customers discover the discount at checkout, they may feel like they’re getting a great value for the price.


Drawbacks of Hidden Discounts at Checkout

  1. Potential for Customer Frustration

    • One of the biggest risks of hiding the discount until checkout is that it can lead to confusion or frustration. Customers prefer transparency, and they might feel misled when they don’t see the final price upfront. The lack of clarity about the final price can create trust issues, potentially causing customers to abandon their purchase.

  2. Increased Cart Abandonment at Checkout

    • While customers may be excited about the hidden discount, some may also hesitate when they realize that the final price isn’t displayed upfront. The uncertainty around the total price can lead to higher abandonment rates at the checkout page. This is especially true if other fees (like shipping or taxes) are added to the final price, making it feel like a bait-and-switch.

  3. Missed Immediate Purchase Opportunity

    • When customers see the discounted price at checkout, it may create excitement, but the moment for impulse buying may have already passed. If customers had seen the discount earlier, they may have decided to buy on the spot. Hiding the discount can cause them to second-guess their decision, ultimately leading to hesitation.

  4. Increased Bounce Rate in the Cart

    • When the price isn’t shown upfront, it can discourage some customers from continuing to checkout. Knowing the final price early helps them make a quicker decision, and lack of transparency may cause hesitation that turns into abandonment.



A/B Testing for Discount Visibility: Product Page vs. Checkout


To determine which strategy works best for your brand, consider A/B testing both approaches. Here's how:

Test 1: Showing Discount on the Product Page

  • Group A: Display the discounted price on the product page (e.g., show the original price with the new discounted price clearly visible).

  • Group B: Display the original full price without any mention of the discount.

Measure: Track conversion rates, cart abandonment rates, and customer satisfaction for each group.



Test 2: Showing Discount Only at Checkout

  • Group A: Show the full price on the product page, but notify customers that a discount will be applied at checkout.

  • Group B: Keep the discount hidden until checkout.

Measure: Measure how many users proceed to checkout and complete the purchase. Compare cart abandonment and total sales for both variations.



Suggestions for Improvement

  1. Show the Discount on the Product Page

    • A more transparent approach would be to display the discount on the product page. This can help boost the customer’s confidence in making a purchase decision. Showing a “was $300, now $200” price tag alongside the percentage saved gives the customer a clear understanding of the deal. Remember Grand Maa's theory: people are too lazy to do the calculations alone.


  2. Clearly Communicate the Offer at Checkout

    • If you choose to keep the discount hidden until checkout, prominently display a message on the product page like, “Save 20% at checkout” or “$50 off your purchase at checkout.” This will help manage expectations and give customers a sense of value, reducing confusion or frustration later.

  3. Add Urgency to the Discount

    • Adding urgency or scarcity to your offer (e.g., “Limited time only” or “While stocks last”) can enhance the effect of offering a surprise discount at checkout. It encourages customers to act quickly, knowing they might miss out on a good deal.




 
 
 
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