Discount Code Guide
Are your discount codes driving new revenue or just subsidising purchases that would have happened at full price? Most brands do not know.
Discount codes are the most misused tool in eCommerce. Used strategically, they drive new customer acquisition, increase AOV, and recover abandoned carts. Used carelessly, they train customers to never pay full price and erode margins permanently.
This guide covers the strategic approach to discounts — which types to use, when to use them, and the guardrails that protect your brand from discount dependency.
150+
Brands Served
$23M+
Revenue Driven
10-15%
Sweet Spot Discount
Strategic
Not Reactive
How to fix this — step by step
Match discount type to objective
New customer acquisition: welcome discount (10-15%). AOV increase: threshold discount ("$20 off $100+"). Cart recovery: last-resort discount (10% in final email only). VIP reward: exclusive discount. Clearance: seasonal percentage off. Each objective gets a different type.
Set discount guardrails
Maximum discount percentage (never exceed 25% unless clearing dead stock). Minimum cart value for discount activation. Exclusion list (new arrivals, hero products never discounted). Expiration dates on every code.
Create unique tracking codes
Unique codes per channel: WELCOME15 for popup, CART10 for abandonment, FLASH20 for flash sales. Track revenue per code in Shopify to know which discounts drive incremental revenue vs. cannibalise full-price sales.
Use dollar-off instead of percentage for cart recovery
"$10 off" feels like free money. "10% off" requires mental maths. For cart recovery and email incentives, dollar amounts convert better below $100 cart value.
Measure incrementality
Track what percentage of discount-code sales would have happened at full price. If discount users have the same purchase patterns as full-price buyers, you are subsidising, not incentivising.
Want us to handle this?
Strategic discounting is a science, not a gut feeling. The brands that use discounts effectively drive growth without eroding margins.
Questions our best clients asked first
Use discounts strategically, not desperately
Book a call and we will audit your discount strategy, identify where you are over-discounting, and build a framework that protects margins while driving growth.
Pick a Time15 minutes. No pitch deck. Just your data and our honest take.
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