Several times a month I get asked if it’s true that if a clearance items at Target ends in a “4″ if that means it is the last time it will be marked down. There was an article on Yahoo titled “How to Save Money at Target”, and this rumor was stated in the article and it’s simply NOT true.
Here is a statement from the article:
“The key is to check if the price ends in a “4.” “If the price on the sticker ends in an ’8,’ it will be marked down again,” says (the reader). “If it ends in a ’4,’ that’s the lowest it will be. So if you see a price ending in a ’4′ at 50 percent off, you might want to grab it now, because it’s not going to get any cheaper.”
Target does not have a secret code where if they mark down an item with a “4″ it will not be marked down again. When Target marked down their items to 75% off (currently items are now only being marked down to 70% off), all clearance items would end in either a “4″ or an “8″. However, it is not based on the fact that it is a final markdown, it is based on what the starting price of the item was.
Here is an example: Let’s say the original price of an item was $39.99. If you take 50% off of that price, you get $20.00, since the ending number is closer to an “8″ than it is a “4″ it would be priced $19.98. If we took 75% off, you would get a price of $10.00, since the ending number is again closer to the “8″ that makes the final clearance price $9.98.
Here is another example: Let’s say the original price of an item was $14.99. If you take 50% off of that price, you get $7.50, since the ending number is closer to an “8″ than it is a “4″ the marked down price would be $7.48. If we took 75% off, we would get a price of $3.75, since the ending number in the markdown price is closer to a “4″ instead of an “8″ the final clearance price would be $3.74.
I hope that makes some sense! It is true that many final markdowns do often end in a “4″, but it’s only because the price started out closer to an odd number (like $15) than an even number (like $40) and not because it’s an indicator of a final markdown.
Let me share an example I found in-store at Target over a period of a couple of weeks:
I spotted All Small & Mighty laundry detergent on clearance. The first time I saw the item it was only marked down to 15% off.
Here is close-up of a price tag, so you can see it is marked down to $4.24. According to the theory, you should buy this item now, because it won’t be marked down any lower since it ends in a “4″.
However, the following week I found the laundry detergent had been marked down to 30% off, only now the item ended in an “8″. This goes to show that an item can in fact go lower even after it had a price that ended in a “4″.
Here is the math for this one :
Starting Price = $4.99
15% off markdown = $4.24
30% off markdown = $3.48
50% off markdown = $2.48
75% off markdown = $1.24
You can see how these numbers will alternate between “4″ and “8″ based on the math.
The best way to know if an items is at it’s lowest markdown is if it’s at 70% off, that is the last markdown level on merchandise at Target (with the exception of holiday/seasonal merchandise, they go down to 90% off). If you see an item at 70% off, that will be the lowest it will go.
If you have any questions let me know?