A Practical Glossary of Savings and Discount Terms

APY (Annual Percentage Yield)

The actual rate of return on a savings account or investment over one year, including the effect of compounding interest. Higher compounding frequency produces a higher APY relative to the stated interest rate. Use APY when comparing savings products — it reflects what you'll actually earn.

Price Anchoring

A marketing technique where a higher reference price is displayed alongside a sale price to make the discount appear larger. The anchor price may be an inflated "original" or a manufacturer's suggested retail price rarely charged. Recognizing anchoring helps you evaluate a deal on actual value rather than perceived markdown.

Cashback

A rebate — usually expressed as a percentage of spending — returned to the buyer after a purchase, either through a credit card reward program or a third-party shopping portal. Cashback is only realized when it meets any minimum payout threshold and is actually redeemed.

Stack (Coupon Stacking)

The practice of combining multiple discount types on a single purchase — for example, applying a store coupon, a manufacturer's coupon, and a cashback portal reward simultaneously. Retailer policies on stacking vary and are usually stated in their coupon terms.

Reference Price

The "was" or "original" price shown alongside a sale price, used to communicate discount magnitude. Reference prices are not always reliable indicators of what an item actually sold for. Consumer protection guidelines in many U.S. states require that reference prices reflect real prior selling prices, though enforcement varies.

Loss Leader

A product priced at or below cost to draw shoppers into a store or onto a platform, where they are expected to purchase additional, higher-margin items. Recognizing loss leaders helps you capture genuine savings without overspending on surrounding purchases.

Promotional APR

A temporarily reduced interest rate — often 0% — offered on credit products for a set introductory period. Once the period ends, the rate typically resets to the standard APR, which may be significantly higher. Any remaining balance at reset accrues interest at the new rate.

Net Price

The amount actually paid after all discounts, rebates, coupons, and applicable fees are applied. Net price is the most accurate figure for comparing the true cost of competing offers.

Markdown vs. Discount

A markdown is a permanent reduction in a product's listed retail price, typically used to clear inventory. A discount is a temporary price reduction that may require a coupon, code, or membership. The distinction affects how long the lower price will be available.

Minimum Advertised Price (MAP)

A floor price set by a manufacturer below which retailers agree not to advertise a product. MAP policies do not legally prevent a retailer from selling below MAP at the point of sale, but they restrict how low prices can be publicly listed or marketed.

Rebate

A partial refund issued after purchase, usually requiring the buyer to submit proof of purchase. Unlike an instant discount, a rebate is received later and may require tracking and follow-up to collect. Unclaimed rebates represent a common source of consumer leakage.

Price Matching

A retailer policy that adjusts a product's price to match a lower price found at a competing retailer. Price match policies vary by store and typically require proof of the competitor's current price, specific matching criteria, and may exclude certain seller types.