The effect of discount prices on consumer perceptions and retail competition is the subject of much debate. The persistent use of discount pricing in the marketplace, however, implies that advertisers believe discount prices effect consumer perceptions and purchase decisions. This study examined whether advertiser`s discount price claims effect consumer perceptions. Experiments compared to an advertisement with no discount price, an advertisement with a plausible discount price raised subject`s estimates of the advertiser`s regular price and the perceived offer value. The controlled laboratory experiments employed in this study investigated the effects of plausible and exaggerated discount prices on consumer perception of perceived offer value, search benefit, perceived saving purchase intention. The mayor findings of this study could be summarized as the following: The plausible discount price improved subject perception of the advertised offer. In the research, it finds that a higher plausible discount price for the pizza consistently makes the offer appear to be a better value than if no discount price appears in the advertisement. Further, the perception effects of a plausible discount price become stronger as the advertised discount becomes larger. Am exaggerated discount price had generally the more negative effects on perception than plausible reference price, even for the more skeptical subjects. The exaggerated discount price dropped subject`s internal reference price, perceived offer value. These results indicate that consumers can be skeptical of advertised discount prices acid same time be influenced by them. The results in this study appear to be particularly robust, as the exaggerated discount price reduced advertisement believability and decreased market prices estimates and offer value perceptions.