Despite the "gimmick" reputation, BOGO deals serve practical business purposes beyond just luring in customers:
Offering a BOGO deal can sometimes preserve a product's perceived value better than a deep discount, as the main item is still "sold" at its full price.
Shoppers often spend more than they originally intended because they feel compelled to reach the "deal" threshold. Fireworks Pricing - Save Money with MAD Fireworks
BOGO deals often calculate the "buy one" price at the full Manufacturer’s Suggested Retail Price (MSRP) , which is typically much higher than what you would pay at a warehouse or wholesaler without a BOGO promotion.
Some retailers double the base price of an item so that you are effectively paying full price for two items rather than getting one for free.
In practice, some BOGO offers simply function as a 50% discount. For example, if a firework is $4 with a BOGO sign, you might find it rang up as $2 per item on your receipt. 2. Why Retailers Use BOGO