Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Package Deal

What it is:

A package deal combines several products, discounts, features or services as one transaction.

How it works (Example):

Let's say John Doe is considering taking a cruise. He could purchase his airfare and cruise separately for $500 and $1,500, respectively, or he could book the airfare through the cruise line and get a package deal for $1,800. By doing the package deal, he would save $200.

Why it Matters:

Package deals occur throughout the consumer world. In many cases, they provide a way for a buyer to save money by purchasing a group of things he or she wants anyway and receive a reduced price. Often, package deals are available from vendors who are able to buy the items in bulk.

However, package deals often include items, products or services the consumer does not want. For example, cable subscription packages often include several channels that the consumer does not want or watch. Accordingly, promises of "all this for just $19.99 a month" can sometimes create situations in which consumers pay more than they would if they purchased the items separately.