Kohl’s Department Store vs Math

Ah, Kohl’s Department store. You are one of the only department stores in the country that has managed to grow and prosper even through the darkest of this recession. How do you do it?

Is it your friendly staff and customer service?

No, you will never find someone on the floor past the cash register, and the people that are at the register are required to jabber on about Kohl’s cards and cash and savings, yadda yadda yadda, for all eternity.  It is impossible to leave that store without Kohl’s letting you know what a favor they’re doing you by letting you shop there.

Is it about the wonderful brands you carry?

No, no one shops at Kohl’s to look great. You shop at Kohl’s to not look bad. Have you ever said to someone “wow, nice shirt. Did you get that at Kohl’s?” Nope, that’s not a thing. Kohl’s is pretty much Goodwill with a bigger selection, and some of their clothes don’t smell like the previous owner.

Kohl’s has been so successful for the simple reason that they have managed to capitalize on our country’s greatest weakness. Math. They then take that weakness and exploit it using watered down discounts and coupons. Floor sales, mailer coupons/discounts, charge cards discounts, special sale day discounts, scratch off discounts, and more all look deceivingly good.

For example –

Everyone that has ever been to Kohl’s knows that everything they sell is at LEAST twice as expensive as Kohl’s expects you to pay for it. An item they expect to sell for $50 is on the floor for no less than $100, and it’s usually closer to $150 depending on what type of product it is. Items that have more opportunities for discounts (clothes) are usually higher.

Dress pants are a good example. A pair of pants they expect to get $40 for would be at least $120 in store. Doesn’t seem so bad, because it’ll have an immediate sale price of 40% off. That brings it down to $72 already! It’s still high, but that’s OK, because we have a 20% off coupon and when we start our Kohl’s charge we’ll get another 10% off. 70% off of $120 is $84, so we’re getting these pants for $36. They can’t be making that much money on these things!

Wrong. Those discounts most definitely do not work like that. The discounts apply one at a time, so we’re looking at an entirely different number. the first 40% does take it from $120 to to $72, but your second discount of 20% is not as effective. Those sneaky marketing people have now devalued your additional coupons, because instead of your 20% coupon being worth 20% of the $120 ($24), it’s only worth 20% of the $72 ($14.40). Your coupon is only worth 60% of what it seems like it would be worth.

The 10% of the card gets even worse. 10% of the $120 would be 12 bucks, but now you’re getting it off the current value of the $57.60. That’s 5.76 off, which takes that 10% discount and makes it worth less than 5% off your total starting amount.

Your original estimate of $36 for the pants is actually off by $15.84, at 51.84. You’re paying 44% more for those pants than you might have thought. Even if you had three more 10% off coupons for a total of 100% worth of discounts those pants would cost more than the $36 you had in mind.

It gets even worse if you have one of those little coupons Kohl’s mails out every so often for $10 off your next purchase during a select time period. That would bring those pants down from $51.84 to $41.84, making them very close to what you originally expected to pay for them, right?

Nope, that discount gets applied to the original $120 price of the pants, even though Kohl’s at no point ever intended you to buy them for that much. Your ten dollars is subject to all your discounts, so it’s actually worth $4.32. Not exactly as exciting as your original $10. Instead of your $36 – $10 coupon sitting you at $26 you actually are going to be paying 51.84 – 4.32, or 47.52. That’s almost 83% more than you thought.

This is all better than if instead of those pants being 40% off initially, they were 20% off, and then an additional clearance price of 20% off the sale price! If that was the case you’d end up paying about $4 more for those pants.

Long story short, if you do go to Kohl’s just get in line behind an old lady. I guarantee you will watch her get about eight total discounts adding up to somewhere around 200% off of her purchases. If Kohl’s can make money off those people that have all day to take advantage of every coupon that’s ever been offered in all existence, that would mean that if you have a job or a family you have absolutely no hope of avoiding getting sodomized by them.