The system currently provides this functionality on a product by product level. To generate the visual indication that the product is on sale, login to your Admin Control Panel and click Products > View Products, then click the "Edit" link for the product that you wish to add the sale to.
Down towards the bottom of the new screen that appears will be the price section. If you can expand the price option by clicking the "More Price Options" link, you'll see several boxes that you can enter an amount into. If you enter an amount in the "Retail Price" field, this will be shown in the shopping cart software's front-end as the price before the sale and either the "Sale Price" field or the "Price" field will become the current price.
If you do not enter an amount in the "Sale Price" field, the system will accept the amount in the "Price" field as the current on-sale price. The price entered in the "Retail Price" will be displayed with a line through it and the current on-sale price will be displayed next to it.

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