I saw an item at H&M last weekend, that has a price tag of 9,90 eur, and then an additional red tag that says "Dieser Artikel ist auf €2 reduziert". So does this item now cost 7,90 uer or 2 eur?

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it now costs 2 € - reduziert auf means reduced to, reduziert um means reduced by!

Ah ok, thanks. I was just wondering how an item can be reduced by more than 50% of its original price. Oh well, it actually does happen.

Yep, now they're only making €1.50 off said H&M item instead of €9.40