ECOMMERCE TIPS
How to create a discount code on Shopify: A step-by-step walk-through
by Tide
With 41% of online shoppers (oberlo.com) making purchasing decisions based on coupons, discount codes are strategic tools for your businesses of all sizes to ignite sales, reward loyal customers, and efficiently manage inventory. If you are looking to master how to create a discount code on Shopify that truly drives results, you are in the right place!
This step-by-step guide will show you everything about setting up, managing, and optimizing these effective promo code offers on your Shopify store.
Here is what we’ll take you through:
Benefits of discount codes on your running a Shopify store
Different types of Shopify discount codes and use cases of them
Instructions on how to create a discount code on Shopify (native tools and third-party apps) and when to use each of them effectively
Right strategies for managing, optimizing and promoting your discount code to spark sales
Some issues make your discount code not be working and solutions for them
Imagine quickly setting up a "Flash Sale: 20% Off All Accessories!" or sending out "Thanks for your first order! Here's 10% off your next" - and seeing your sales dashboard light up. It’s so fantastic, is it? Let’s get started now!
1. Why use discount codes in your Shopify store? Key benefits
Learning how to create a discount code on Shopify is essential because discount codes are proven sales drivers that deliver measurable results for your business. They increase conversion rates, attract new customers, reward loyalty, and help move inventory faster.
Here are the key advantages discount codes bring to your Shopify store:
1.1 Drive sales & conversions
Discount codes turn browsers into buyers. They provide that final push hesitant customers need to complete their purchase, creating urgency and perceived value that directly boosts your conversion rates and revenue.
A well-timed discount can be the deciding factor for a customer on the fence.
1.2 Acquire new customers
Offering a compelling welcome discount code (e.g., "10% off your first order") is an excellent strategy to entice first-time visitors to make a purchase.
It lowers the barrier to purchase and gives new shoppers an immediate reason to buy from you instead of competitors.
1.3 Reward loyal customers
1.4 Reduce cart abandonment
One of the biggest challenges in eCommerce is cart abandonment. A strategically deployed discount code, perhaps as an exit-intent pop-up or a follow-up email, can be the perfect nudge to convince customers who are about to leave their cart to complete their purchase.
This targeted incentive can significantly reduce your abandoned cart rate and recover lost sales.
1.5 Promote specific products
1.6 Gather customer data
2. Types of discount codes you can create on Shopify
Shopify allows you to create various types of discount codes based on your promotional goals. You have 4 basic choices:
Amount off orders: Percentage or fixed dollar amount off total purchase
Amount off specific products/collections: Target specific items or categories
Free shipping: Remove shipping costs to incentivize purchases
Buy X Get Y: Bundle deals that encourage multiple item purchases
2.1 Amount off orders (Percentage or fixed amount)
These are perhaps the most common and versatile discount types, offering a direct reduction on a customer’s total order value, making the savings clear and straightforward. There are two options:
Percentage discounts: This scales with the order size, making it particularly attractive for larger purchases (e.g., "10% Off your entire order”).
Fixed amounts: This provides a clear, upfront monetary saving that resonates well with customers (e.g., "$10 Off your purchase").
These are ideal for general store-wide promotions,welcome offers for new subscribers, seasonal sales (like a "Holiday Savings Event"), or recovering abandoned carts with a quick incentive. Their simplicity ensures customers easily understand and apply them.
2.2 Amount off specific products/collections
This discount type allows for highly targeted promotions, applying a reduction to individual items or entire groups of products. It is invaluable when your goal is to focus on particular inventory or highlight specific product lines.
You can try one of these options:
Percentage reduction: This scales the discount proportionally to the item's price within the targeted collection or product (e.g., "25% off all Summer Dresses").
Fixed amount reduction: This provides a set monetary saving on a specific product, regardless of its original price (e.g., "$5 off our New XYZ T-Shirt").
This discount type is ideal for clearing old or excess stock, boosting sales of new arrivals, or promoting high-margin items where you have more flexibility to increase overall profitability.
2.3 Free shipping
Free shipping is a powerful incentive, often cited as a top motivator for online purchases. It eliminates the hidden cost that frequently deters customers at checkout.
You can offer:
Free shipping on all orders: This provides a universal benefit to every customer, regardless of their purchase size.
Minimum purchase amount: This encourages customers to increase their cart value to qualify for the discount, effectively boosting your Average Order Value (AOV) (e.g., "Free Shipping on orders over $50").
Free shipping will be ideal for encouraging higher AOV, reducing cart abandonment, and especially serving as an excellent alternative for luxury brands or high-end audiences where heavily discounting products might devalue the brand. It allows you to offer a compelling deal without directly lowering product prices.
2.4 Buy X get Y
Free shipping is a powerful incentive, often cited as a top motivator for online purchases. It eliminates the hidden cost that frequently deters customers at checkout.
You can offer:
Free shipping on all orders: This provides a universal benefit to every customer, regardless of their purchase size.
Minimum purchase amount: This encourages customers to increase their cart value to qualify for the discount, effectively boosting your Average Order Value (AOV) (e.g., "Free Shipping on orders over $50").
Free shipping will be ideal for encouraging higher AOV, reducing cart abandonment, and especially serving as an excellent alternative for luxury brands or high-end audiences where heavily discounting products might devalue the brand. It allows you to offer a compelling deal without directly lowering product prices.
3. How to create a discount code on Shopify: Native method?
Creating a discount code directly within your Shopify admin is a straightforward process, which is advantageous for its simplicity and direct integration with your Shopify store. While powerful for a wide range of uses, it is generally best for less complex discount rules.
Follow these steps to know how to add a discount code on Shopify and get your promotion live!
Step 1: Accessing the discounts section
Step 2: Creating a new discount
A modal will appear asking you to choose a discount type. Select your discount types, then choose Discount code (as opposed to "Automatic discount," which we'll discuss later).
In this article, we choose Amount off products for an example.
Step 3: Naming your discount code
In the Discount code field, enter the code you want customers to use:
Choose a memorable and clear code such as WELCOME10, FREESHIP50.
Or click Generate code if you prefer a random, unique string of characters.
Best practices: Keep it simple, relevant, and avoid special characters or confusing terms.
Step 4: Configuring the discount value
Choose one: Percentage or Fixed amount
Enter the appropriate values, for examples:
For percentage: 10%
For fixed: $5
With Free shipping, Buy X Get X:
Free shipping: Choose the shipping methods to apply to (e.g., all shipping rates, specific rates).
Buy X get Y: Configure the "Customer buys" quantity/amount and the "Customer gets" product(s)/collection and discount (e.g., "Buy 2 T-shirts, Get 1 Cap free").
Step 5: Setting minimum requirements (Optional)
To qualify for the discount, you can set minimum requirements:
Minimum purchase amount: The customer's subtotal must reach a certain value (e.g., "$50").
Minimum quantity of items: The customer's cart must contain a certain number of items (e.g., "3 items").
Step 6: Choosing which products the discount applies to
Determine what products or collections the discount will apply to.
All products: The discount applies store-wide.
Specific collections: Select one or more specific collections from your store.
Specific products: Individually select specific products.
You can easily search for and select collections or products within the Shopify interface.
Step 7: Specifying customer eligibility (Optional)
You can control who can use the discount code.
All customers: Any customer can use the code.
Specific customers segments: Apply the discount only to specific customer segments (e.g., VIP customers, first-time buyers). This requires you to have customer groups already created in Shopify.
Specific customers: Select individual customers by name or email.
Step 8: Setting usage limits in maximum discount uses section (Optional but recommended)
Control how many times your discount code can be used to manage your budget and exclusivity.
Limit number of times this discount can be used in total: Set a global limit (e.g., 100 uses).
Limit to one use per customer: Ensure each unique customer can only apply the code once.
Step 9: Choosing discount combinations (Important!)
This crucial setting determines if your discount can be used alongside other active discounts.
You can allow combinations with Product discounts, Order discounts, or Shipping discounts.
Note: Allowing combinations can lead to deeper discounts than intended, potentially impacting your profitability. Disallowing combinations ensures the discount stands alone. Choose carefully based on your promotional strategy.
Step 10: Setting active dates
Define when your discount code will be active.
Set a Start date and, optionally, an End date.
You can also specify precise start and end times for timed promotions.
Step 11: Saving and making the code active
4. How to create discount codes using Shopify apps?
While Shopify’s built-in discount system is robust, specialized Shopify apps offer advanced functionalities that can automate, customize, and significantly enhance your discount code strategy.
If you are managing a high-volume store or looking to create more engaging and personalized discount experiences, apps can significantly expand what's possible with their advantages below. Keep reading to explore them!
4.1 Why use an app for discount codes?
Bulk generation of unique codes: Essential for large-scale email marketing campaigns, direct mail, or print inserts where each customer needs a unique, single-use code.
Automated code creation: Apps can automatically generate and apply codes based on triggers (e.g., welcome popups for new visitors, post-purchase offers, birthday discounts).
More complex discount logic: Go beyond Shopify's native "Buy X Get Y" with highly conditional rules (e.g., "Buy X, Get Y if Z is also in cart," multi-tiered discounts, or discounts based on specific customer tags).
Integrated promotion & display: Many apps offer built-in features to display your discounts through popups, gamified wheels, announcement bars, or even directly on product pages, increasing visibility and conversion rates.
Enhanced management & analytics: Apps often provide more detailed dashboards, analytics, and automation tools for managing complex discount strategies and tracking their performance.
4.2 General process using a Shopify discount app
How to add a discount code to Shopify via third-party apps? Follow these steps below to set up your own promotion with apps.
(Note: Steps vary significantly by app, but generally follow this flow)
Step 1: Install the chosen app from the Shopify App Store.
Step 2: Access the app's dashboard within your Shopify admin.
Step 3: Navigate to the discount/coupon creation section within the app.
Step 4: Configure the discount type, value, rules, and limits using the app's interface. This is where the app's advanced logic comes into play.
Step 5: Use the app's features for bulk generation, automation triggers (e.g., "on exit intent," "after purchase"), or specific display settings (e.g., pop ups, cart drawers).
Important note: Some apps seamlessly sync codes back to the Shopify admin's Discounts section, while others manage and track them solely within the app's dashboard. For simplicity and to minimize potential conflicts with other promotions, it's often recommended to prioritize Shopify's native discount functionalities whenever your needs can be met by them. And always consult an app's documentation to understand its integration with Shopify discounts to avoid unexpected issues.
5. How to create a discount code on Shopify - Choosing the right method: Built-in vs. App
When learning how to create discount codes on shopify, deciding between Shopify's built-in features and a third-party app is important as well. It depends on your needs.
For detail, you should consider using native tools when:
You need simple, straightforward discount codes (percentage, fixed amount, free shipping, or basic "Buy X Get Y").
Manual creation and management of codes are sufficient for your volume.
You have a limited budget and want to utilize Shopify's core functionalities.
You are comfortable with basic usage limits and customer eligibility rules.
On the other hand, you can consider leveraging third-party apps when:
You need to generate unique codes in bulk (e.g., for email campaigns to thousands of subscribers).
You want automated code creation triggered by specific customer actions (e.g., welcome popups, post-purchase offers).
Your discount logic requires complex rule combinations that Shopify's native system does not support.
You need integrated display options like gamification, announcement bars, or sophisticated popups.
You desire advanced tracking, analytics, or loyalty-based discount systems.
6. How to manage and promote your Shopify discount codes?
6.1 Tracking performance
Shopify provides built-in tools to monitor your discount code's effectiveness.
Sales by discount report: Navigate to Shopify Admin > Analytics > Reports > Sales > Sales by discount. This report provides crucial insights.
Metrics to look for:
Total uses: How many times the code has been applied.
Total orders: The number of orders where the discount was used.
Total sales: The gross sales value generated with the discount.
Average order value (AOV) with discount: Compare this to your overall AOV to see the impact.
6.2 Effectively promoting your discount codes
Once your code is live, let’s effectively communicate with your customers.
Email marketing: Send exclusive codes to your subscriber list.
Social media: Share codes on your active platforms.
Website banners/pop ups: Prominently display codes on your homepage or relevant product pages.
Exit-intent offers: Capture abandoning visitors with a last-minute discount.
Using unique codes: Ideal for tracking the performance of specific channels or influencer marketing campaigns.
Shareable links: Shopify allows you to create shareable links that automatically apply the discount when clicked, simplifying the customer experience.
As the results of strategically employing these various channels, you can ensure your discount codes reach the right customers and drive maximum engagement.
7. Discount codes vs. automatic discounts: When to use which?
Depending on your marketing goals and how you want customers to experience promotions, you'll need to choose between two key types: discount codes and automatic discounts. Each has its own strengths and ideal use cases - understanding the difference will help you apply the right one at the right time.
With Discount codes, they require the customer to manually enter a code at checkout to apply the discount.
Best for: Exclusive offers, loyalty rewards, segment-specific promotions (e.g., "WELCOME10," "VIPFREE"), influencer campaigns, or promotions you want to track by specific code usage.
With Automatic discounts, they are automatically applied at checkout when the customer's cart meets the specified criteria. No code entry is needed.
Best for: Site-wide promotions, seasonal sales (e.g., "Black Friday Sale: 20% off automatically"), flash sales, or any offer where you want maximum ease of use for the customer and less friction at checkout.
In short, you can consider using discount codes when targeting segments or needing control over usages. And you may use automatic discounts for broad appeal.
8. Troubleshooting: Why your discount code might not be working?
If a customer reports an issue with their discount code, here are common reasons why it might not be working:
Code mistyped by customer: The most common culprit. Advise them to double-check their spelling.
Minimum requirements not met: The cart value or item quantity does not meet the minimum set for the discount.
Applies to products/collections not in the cart: The discount is for specific items that are not in the customer's current order.
Customer eligibility not met: The customer is not part of the specific group or isn't the specific customer the discount is for.
Usage limits reached: Either the total number of uses for the code has been exhausted, or the customer has already used their one-time limit.
Discount expired: The current date is past the "End date" you set for the discount.
Cannot combine with other discounts in the cart: The customer has another discount (automatic or code) applied that prevents your code from being combined with it.
The key point is to double-check your settings and test the code in your store before launching it to customers.
9. Conclusion
Knowing how to create a discount code on Shopify is an accessible and highly effective strategy for boosting your store's sales and revenue.
Whether you opt for Shopify's versatile built-in features for straightforward promotions or leverage advanced third-party apps for complex automations, understanding the “shades” of discount types, settings, and strategic application is key.
Here are some key takeaways for you from the article:
Choose wisely between native and apps: Use Shopify's built-in features for basic discounts; opt for third-party apps for bulk unique codes, complex rules, automation, or integrated display.
Match discount to your goal: You need to select percentage/fixed amount for general sales, specific product/collection for inventory, free shipping for AOV boost, and "Buy X Get Y" for bundling.
Set smart usage limits: Always use usage limits, carefully consider combinations, and set minimum requirements for control and profit.
Promote discount codes & track: Share codes widely (email, social, web) and monitor performance using Shopify's reports and analytics to optimize.
Troubleshoot common issues: Be ready for mistypes, unmet minimums, expired codes, or combination conflicts to assist customers effectively.
Are you ready to boost sales and unlock hidden revenue with discount codes on Shopify? Follow our steps above and create your first Shopify discount code today!
Tide Dang
Content Creator | Qikify
TABLE OF CONTENT
- 1. Why use discount codes in your Shopify store? Key benefits
- 2. Types of discount codes you can create on Shopify
- 3. How to create a discount code on Shopify: Native method?
- 4. How to create discount codes using Shopify apps?
- 5. How to create a discount code on Shopify - Choosing the right method: Built-in vs. App
- 6. How to manage and promote your Shopify discount codes?
- 7. Discount codes vs. automatic discounts: When to use which?
- 8. Troubleshooting: Why your discount code might not be working?
- 9. Conclusion
