Discounting may lead to higher prices

Retail discounting reduces the likelihood that consumers will shop around, leading to less competitive outcomes for consumers and potentially higher prices.

Researchers from the University of Adelaide conducted an experiment exposing consumers to both net prices and gross prices with a discount.

Finding consumers overvalue discounts in-store but undervalue discounts they simply hear about in other stores. Consumer unwillingness to shop around leads to higher prices and reduced competition.

Read more at University of Adelaide