Considering Discount Codes for Your Business?

Katie Fleming

Katie Fleming

Co-founder and COO of Owner Actions

A person presses a pay key on a keyboard to apply discount codes

A 2020 survey found that 88 percent of consumers in the United States used coupons or discount codes when shopping online. This popular shopping practice extends to Etsy, where up to 71 percent of shoppers attempt to find the best deals on items, and Shopify, where stores report up to an 8x increase in sales when coupons are used.

Discounts codes may be a strategy you want to use if you’re looking to drive sales and win over customers on the fence about making a purchase. In this article, we’ll help you explore your discounting options. We’ll also share resources to implement them in the e-commerce modules you may already be using.


What are discount codes?

Discount codes are unique strings of letters or numbers buyers can use at checkout to reduce the cost of a purchase. Some codes are one-time use, meaning only one buyer can use the code before the shopping platform cancels it out. Others are multi-use; anyone who finds that code can use it to save on their purchases.


Why would I want to offer a discount?

Discounts aren’t right for every business. In fact, there are several reasons many brands avoid using discount codes and coupons altogether:

  • Discounts lower sales margins and profitability.
  • Codes can attract buyers who care more about price than loyalty to a brand.
  • Discounting slows conversion rates by training shoppers to wait for deals rather than paying full price for an item.
  • Bargain opportunities can undermine the air of exclusiveness some brands try to cultivate.


But, at the same, discount codes can help store owners realize big wins:

  • Discounts can help owners speed up the turnover of their stock.
  • Deals can boost customer acquisitions.
  • Codes and coupons can drive sales among price-conscious shoppers who may build loyalty to the brand.
  • Discounting can drive volume and help owners accomplish their sales goals.


Discount codes aren’t an effective strategy for every business, even those with tough-to-meet sales goals. This practice works best for businesses with sizable margins that can bear a cut through discounting AND want to appeal to customers who value price over many other factors.

Competing on price is a common practice, but it’s one that’s difficult for many businesses to sustain. Be sure to add other competitive differentiators such as speed of delivery, options for personalization, or top-tier customer service to make your business one that customers return to time and again.


Our article, Brand Differentiation 101: How to Set Your Business Apart, can help you explore this strategy.


How do I get started?

First, explore some of the approaches business owners use when discounting. Two of the most popular options are:


Percentage-off discounting
where owners discount their entire store or a product line by a fixed percentage to help them liquidate stock


Dollar-value discounting
where owners provide a flat dollar rate discount when customers spend a certain amount in their store. In your business, you might set terms such as “spend $100, get $15 off” to encourage larger-value purchases.


Next, experiment with the various ways you could use these strategies to meet your sales goals. Your ideas may include:

  • Pre-launch codes
  • Offers for first-time shoppers
  • Customer loyalty discounts
  • Regularly scheduled discounts occurring on a weekly or monthly basis
  • Seasonal deals
  • Abandoned cart offers
  • Influencer codes or codes for referring others
  • Email subscriber discounts


You’ll likely attract new and returning customers to your store, depending on the discounting strategies you implement.

Next, think about strategies you can use to build upon your discounting plans and win the loyalty of those shoppers. You could surprise your customers with discounts automatically applied to their carts, free shipping, or perhaps a free gift with their purchase.

This last move can help you in two ways. First, it can help you drive sales (especially when you require your shoppers to purchase a minimum number of items or meet a minimum spend requirement to be eligible for the gift). Second, it can help you unload an inventory item you have trouble liquidating.

How do I start using discount codes?

Visit your e-commerce module’s help guides. Some of the most popular guides are listed below:














What’s next?

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