Sales
Discount codes: plan a promotion with a clear purpose
Set the purpose, scope and limits of a discount code. Use a simple margin example and test scenarios before launching a store promotion.
A discount code should serve a defined purpose: a first purchase, a selected collection or a returning customer. More orders alone do not prove that the promotion was worthwhile.
Define the scope
Choose products, dates and an audience. Store-wide discounts are simple to explain but can reduce margin on items that would sell anyway. Check which restrictions your current admin panel actually supports.
Calculate the effect
In a simplified example, an item sells for 100 and costs 60 in your model. The difference is 40. A 10% discount reduces that difference to 30: a quarter less, before other charges.
Add payment, packaging, shipping subsidies and acquisition to your own calculation. This illustrates the mechanism rather than providing a complete accounting model.
Explain the conditions
- Eligible products or categories.
- Any minimum order amount.
- Expiry and usage limits.
- Combination with other benefits.
- Effect on delivery charges.
Do not assume a blank limit and zero have the same meaning. Check the interface and test the cart. Do not promise restrictions the software cannot enforce.
Test boundary cases
Try an amount just below the minimum and exactly at it, an excluded item, an expired code and repeat use. Remove products and refresh. Ineligible customers should receive an actionable explanation.
Review against the original goal
Compare order count, discount cost, your calculated margin and new-customer share. Avoid attributing all sales to the code when advertising changed at the same time. Record lessons before increasing the discount.