Once the customer has told the cart where the items are being shipped, the system is ready to calculate shipping and taxes.
Shipping and taxes may seem like completely different concepts, but to a computer system they look identical: they are just charges levied based on some aspect of the transaction. However, these 'charges' can depend on lots of different aspects, so the system doesn't attempt to 'know about' the various taxation rules and shipping charges used around the world, but provides a flexible interface through which they can be specified.
These are perhaps the simplest: a straight, definable percentage is added to the customer's total, based on the total value of the items in the cart. This is frequently used for sales taxes.
These are often used for shipping charges, where you want to charge a specific amount for each item.
Charges are applied to product types. In the simplest store, all product might be of the same type, but in larger stores, you will meed to apply different charge sto different product types, for example to reflect increased shipping charges for heavy items, or diffrent taxation rules for some items.
All the charges can be set to apply to all destinations, or just to defined areas.
It is possible to apply multiple charges to an order. In fact this is quite common: you might apply a shipping charge, and then apply a taxation charge. When you apply multiple charges, you specify the order in which they are applied, and whether the subsequent charges apply to the base value, or also to the charges already applied (or to some of them)
A discount is simply a 'charge' with a negative amount. So all the options open to you for charges also apply to discounts.
A discount (or a charge, for that matter) can be set so that it only applies if the purchaser enters a 'pasword' in the cart. That way, you can give out a special offer code to a subset of your customers.
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