To offer Black Friday discounts without losing money, choose one commercial goal, limit the offer to products that can support it, and check the expected profit before publishing. A sitewide markdown is not a strategy: the right promotion depends on whether you need to clear aging stock, increase basket size, attract customers, or generate incremental revenue.
Start with the outcome, not the discount
Write down the sale’s main job before choosing a promotion. Common goals include clearing aging inventory, acquiring customers, increasing average order value, generating incremental revenue, or bringing shoppers into a store. Choose one primary goal so the offer and its measurement stay aligned. KPMG’s 2025 Australian Retail Outlook advises retailers to define the goal and choose discount tactics and KPIs to match it, rather than piling on multiple offers without a clear purpose.
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Then define how you will tell whether the promotion worked. For inventory clearance, useful measures include the reduction in aging stock and the contribution left after discounts. For larger baskets, measure order value and the share of orders that meet the offer threshold. These are practical ways to operationalize the goals, not published performance benchmarks. Track only the measures that answer your chosen question.
Choose a promotion that fits the goal
Compare the likely gross-profit impact, stock position, product margin, expected basket size, customer-acquisition outcome, and operational complexity. The mechanics below are options to evaluate—not guarantees of profit or growth.
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| Business goal | Promotion to consider | What to check first |
|---|---|---|
| Clear aging or excess stock | Selective markdown, bundle, buy-one-get-one (BOGO), or volume offer | Whether the offer moves the target stock without sacrificing more margin than the clearance is worth |
| Increase spend per order | Tiered discount, bundle, or free-shipping threshold | Whether the added basket value and margin cover the incentive |
| Bring in shoppers | Flash sale or, in some cases, a loss leader | Whether the offer is affordable and, for a loss leader, lawful in the markets where it runs |
| Keep the price reduction smaller | Value-add bonus or selective discount | The actual cost of the bonus and which items can bear a markdown |
| Create time-sensitive interest | Flash sale or early-bird offer | That the deadline is genuine and clearly communicated |
| Show a comparison between options or prices | Price anchoring or decoy pricing | That the comparison is genuine, clear, and substantiated |
Clear stock without discounting everything
Target items selected for stock or margin reasons. A bundle can pair a slow-moving product with a stronger seller; a volume offer or BOGO can help move units when the combined economics work. Avoid automatically including bestsellers, new arrivals, core products, scarce or low-stock items, and products with thin margins. KPMG’s retail playbook recommends protecting those products during broad sale periods when the economics do not support a discount.
Encourage a larger basket
A tiered offer rewards higher spend at increasing levels; a free-shipping threshold gives shoppers a reason to add items before checkout. Set the threshold only after checking the incremental order value and margin against the incentive. A larger basket is not automatically a more profitable one.
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Use urgency only when it is real
A flash sale or early-bird price can focus attention on a limited period. State the actual end time and eligibility clearly, and do not create a false deadline or imply that stock is almost gone when it is not. EU consumer-protection authorities specifically identify false scarcity and misleading price displays as illegal under EU consumer law.
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Consider a bonus instead of a deeper cut
A low-cost extra or service can add value without reducing the listed price as much. Work out the bonus’s real cost, including any fulfillment expense, before comparing it with a markdown.
Treat traffic-driving prices carefully
A loss leader—an item priced very low to attract shoppers—may make sense only if the business can afford the economics and the promotion complies with rules in the relevant market. The appropriate price and legal treatment depend on the circumstances; no universal loss-leading price follows from the tactic itself.
Make price comparisons verifiable
Price anchoring and decoy pricing rely on comparisons between prices or options. Use a genuine reference price and make the basis of comparison clear. Do not invent a previous price, imply savings that customers cannot obtain, or hide eligibility conditions.
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Check the economics before launch
- Set the goal. Decide whether the sale is primarily for clearance, larger baskets, customer acquisition, incremental revenue, or store traffic.
- Select eligible products. Identify the stock the offer is meant to move, and protect products whose availability or margin does not support a discount.
- Model the offer. Estimate the gross-profit effect, incentive cost, and likely operational demands. For thresholds and bundles, check the economics of the full order or package, not just the discounted item.
- Choose a small set of KPIs. Tie each measure to the goal—for example, aging-stock reduction and contribution after discount for clearance, or order value and threshold attainment for a basket-size offer.
- Check every customer-facing term. Verify the reference price, total price, eligibility, deadline, stock claims, and any required fees or conditions for each market where you advertise.
- Record the result. After the sale, compare outcomes with your chosen KPIs and document what worked. If you acquired new customers, look beyond the sale to repeat purchasing and customer lifetime value, as KPMG’s playbook recommends.
Keep prices and promotion terms truthful
Rules differ by jurisdiction. The following points summarize the cited regulators’ guidance; they are not a substitute for checking current requirements in every market where you sell or advertise.
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United States
The Federal Trade Commission’s small-business advertising FAQ says truthfulness standards apply to sale prices and price comparisons, and notes that state or local pricing rules may also matter. Keep records that substantiate advertised prices and check requirements where the promotion will appear.
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The FTC’s small-entity FAQ on the Rule on Unfair or Deceptive Fees says dynamic pricing based on factors such as demand or inventory is permitted if pricing information is not misleading. If a discount is available only to a group, such as loyalty-program members, do not show everyone a price that already includes that discount. When both prices are displayed, the total price available to everyone must be most prominent. The rule took effect May 12, 2025, but Part 464 specifically covers live-event tickets and short-term lodging; it should not be presented as a general retail-fee law.
European Union
The European Commission’s March 26, 2026 report on a Black Friday/Cyber Monday sweep says EU discounts must be based on the lowest price applied during the previous 30 days. In the coordinated screening, 30% of 314 online traders checked referenced discounts incorrectly. The Commission also reported attempted optional basket additions by 36% of traders; among those, 40% did not clearly request consent. Of traders displaying price comparisons, 60% did not clearly explain the reference price. These are findings from a screening, not a census of all online sellers.
The Commission identifies misleading price displays, false scarcity, unauthorized additions, and hidden fees as illegal under EU consumer law, including rules under the Price Indication Directive and Unfair Commercial Practices Directive. Check current requirements and local implementation for the countries where you sell.
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Canada
The Competition Bureau’s November 25, 2025 Black Friday guidance says businesses must not invent a higher regular price to make a discount look larger. It describes two ways to substantiate a regular price: a volume test, where more than 50% of sales occurred at that price or higher during a reasonable period, usually within a year; or a time test, where the product was offered in good faith at that price or higher for a substantial period, usually within a year. It also cautions against ambiguous or unverifiable claims such as “20% off our regular price!”
What consumer data can—and cannot—tell you
Boston Consulting Group’s October 2025 report, Upcoming sales season: How retailers can win, draws on 10,240 unweighted respondents across the United States, Canada, Australia, Germany, France, Czech Republic, United Kingdom, Poland, Italy, and Denmark. BCG says results were weighted to reflect each country’s population distribution and adjusted for global values. The study offers multi-market consumer context, not a forecast of how a particular small business or country will respond to a promotion.
Quick Recap
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