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

1

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.

2

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.

3

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.

4

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.

5

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.

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Strategic discounting is a science, not a gut feeling. The brands that use discounts effectively drive growth without eroding margins.

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Use discounts strategically, not desperately

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