Let x = price of hairdryer
With the 20% off all prices, you are now paying:
x - (x)(.2) = .8x
On the final day, you get an additional 25% off, so you are now paying:
.8x - (.8x)*(.25) = .8x - .2x = .6x
In other words, you are only paying 60% of the original price of the hairdryer. So the overall percentage reduction is 40%.
An easier way to think about it:
20% off means you are only paying 80% or 8/10 or 4/5
25% off means you are only paying 75% or 3/4
So if you paid x, then you are now paying:
x*(4/5)(3/4) = x(12/20) = x(3/5) = (3/5)x = (6/10)x
Which is the same as 60% of x.
That means 40% was the overall reduction.