If you apply a dollar-based discount upon checkout, you may notice that the revenue report for that item may be lower than you expected it to be.
This is because, when applying a dollar-based discount, the final purchase price still has a portion that includes taxes. Thus, the lowered revenue of the purchase is what remains after removing taxes from the final price.
A client purchases a $20 item with a 5% tax rate, and receives a dollar-based discount of $6.
Without the discount, the total is $21.
With the discount, the total is $15.
- In the first case, the revenue is $20 since this was the original price of the purchase, with a tax of $1.
- In the second case, the $15 is the final price, and accounts for the 5% tax. The $15 is 105% of the revenue (revenue is 100%, and taxes is 5%). Thus: Revenue = $15/105% = $14.29
In the above case, the revenue from this purchase will be $14.29, though the final sale price was $15.
If you still have any questions, please feel free to open a support ticket and we will do our best to assist you.