It's a cognitive dissonance issue. People will perceive more value in a discount when they are clearly shown how much they would have paid without the discount,

It's a cognitive dissonance issue. People will perceive more value in a discount when they are clearly shown how much they would have paid without the discount, versus how much they are paying with the discount. Think about how good it makes you feel when you paste in a coupon code during the last stage of a checkout procedure and watch the price drop to half what it was before. You can't quite believe that it has worked correctly, its that satisfying. If you want to really milk it, write a checkout pathway with some javascript that makes the digits of the price spin round like an odometer, preferably with the sound of a slot machine paying out.