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This research examines the effects of bundling format (partially‐bundled attributes vs. unbundled attributes) and framing of promotional discounts (rebate, discount and free‐options) on perceived quality, price acceptability, perceived value and subsequent purchase intentions. The results indicate that price reductions that are framed as providing “free” product options are perceived more favorably than conventional discounts which, in turn, are more favorable than rebates, holding the total amount of a price reduction constant. The results also suggest that unbundling of deals (or segregation of gains) enhances these perceptions.