FAQ: How is my revenue calculated when I provide a manual discount on sales?

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.

For example:
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.

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