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How to choose and create Shopify discount codes for your store

How to choose and create Shopify discount codes for your store

With Black Friday and the holiday shopping season approaching faster than Santa’s sleigh, now is the time to think practical and get things done. 

In that spirit, here is a super practical guide to help you with one of the most important elements of the holiday shopping season – discounts.

This whistlestop guide will take you through every stage of the process:

Deciding on a discount Creating a code – the basics Discount 1 – Percentage or $ off Discount 2 – Free Shipping Discount 3 – Buy X, Get Y

How to decide which Shopify discount code to add

The good news is that, with 4 types of discount code available on Shopify, deciding between them is not too complicated. Having said that, there are a few variations for each discount type – we’ll discuss these as we go through the steps for creating that discount code.

For now, let’s just take a look at the 4 basic types on offer:

  • Percentage discount: a percentage is taken off the price of either individual products or the whole order
  • Fixed amount discount: a $ amount is taken off the price of either individual products or the whole order
  • Free Shipping: shoppers are given free shipping on the items they purchase
  • Buy X, Get Y: when shoppers buy an item, they receive additional items either free or at a discounted price

You can spend days analysing your brand, stock and audience in order to pick the right discount for the holiday season. This detailed blog on holiday discounts takes you through the process of how to decide on the perfect discount for your store.

But today’s blog is all about speed, so let’s keep things super simple.

Choose a percentage or $ off discount code if …

  • Your No.1 target is sales volume. Offering simple % or $ off discounts will drive sales, whether these deals are store wide or on selected products.
  • You want a simple message for marketing. Your marketing messages can get more complex with other types of deal, where you need to explain how it applies or what the specifics are. If your audience responds well to simple, direct messaging, percentage or fixed amount discounts work best.
  • Your competitors are offering significant discounts. Pay attention to the deals and offers your competitors are making. Holiday season shoppers will compare sites to find the best deals. Imagine if your competitors are giving 40% or $30 off. Offering free shipping or buy one, get one free deals on your store may not be eye-catching enough in the heat of the holiday sales.

Choose a free shipping discount code if …

  • You have a luxury brand. Are you building a brand that is based on quality and luxury, or targeting a high-end audience? In these cases, heavily discounting your products might damage your brand, as discounted products can appear cheaper and, therefore, of lower quality. Free shipping is a great way round this, as you can still offer your customers a deal without directly discounting your product.
  • You have a young audience. Free shipping is big for them. In a recent survey, 90% of Generation Z shoppers said free shipping has a direct impact on whether they buy or not.

Choose a buy X, get Y discount code if …

  • You have excess stock. One of the first steps you should take in your Black Friday preparations is checking your stock. If you have a lot of stock of a certain product, you can use buy X, get Y deals to boost sales of this item.
  • You value profitability over turnover. It’s important to go into the holiday season with your business priorities clear. Are you just interested in selling lots, or is staying profitable (even if it means selling less) more important to you? If profitability is your goal, then you’ll want to increase the total number of goods a customer buys in one order. This is all down to a concept called average order value, which is explained in detail in this blog. But all we need to know here is that a deal like “buy one, get a second half price” will be better for your profitability than a simple % off deal.

How to add a Shopify discount code – the basics

Once you have decided on which discount you want to apply, creating a discount code on Shopify is super simple. In a moment we will look through the specifics of adding a discount code for the deal types mentioned above:

  • Percentage and Fixed amount (the steps are the same for these two discount codes)
  • Free Shipping
  • Buy X, Get Y

But first, let’s take a quick look at some of the basics of adding discount codes to your store. These points apply to all the discount code types mentioned.

Where do I go to create my Shopify discount codes?

Simple. Go to Discounts in the Shopify admin for your store to create discount codes.

What name should I give for my discount code?

You can either create a name for your discount or Shopify will generate a code for you. Of course, thinking creatively about naming your discount codes is a nice way to develop your brand. If you have hashtags or slogans for ads that you are using for a particular sale, try these for your discount code too. Don’t forget that you can’t use special characters in your discount code. It’s possible to include spaces, but not recommended as discount codes with spaces can be more awkward to enter at checkout.

How many discount codes can I create?

Your Shopify store has a total of 20 million unique codes that you can use. You can set a limit to the number of times a specific discount is used (we will cover this when we go through the detailed steps). This can be a smart idea if you’re offering VIP discounts or want to create urgency around your sale.

How many times can a customer use a discount code?

This is up to you. You can choose between only allowing an individual customer to use a discount code once, or allowing them unlimited uses. You can also limit the number of times they can apply a discount per order. We will cover how to apply these limits in the detailed steps.

How do I share my discount code with my customers?

Once you have created your discount code, it is as simple as sharing that code with your customers using the best channel to get them clicking. Facebook Messenger is a smart option thanks to its strong open and click through rates. For the content of the message, make sure it aligns with the type of deal you are offering. You can set up your discount code to only apply to specific audiences. So, if it is for loyal customers, focus the message on rewards and gratitude. If it is for customers who abandoned a browse or a cart, focus on fear of missing out.

How do I check how well my discount is performing?

In the Analytics > Reports section of your Shopify admin you create a sales report by discounts. This will show you how often each of your discount codes has been used, and how much each code has generated in revenue. Be aware that it can take some time for data to be shown in these reports.

Can discounts be applied before checkout?

You can create a different type of discount, called an Automatic discount, which is applied automatically at checkout. With this type of discount, shoppers don’t need to enter a code. You can find our how to create an automatic discount here.

How to create a percentage or $ off discount code on Shopify

Here are the specific steps you’ll need to follow to create a percentage discount code.

Step 1

Go to your Shopify admin page, and click Discounts. Click Create discount code and select Discount code. Then enter a name for the new code.

Step 2

Select either Percentage (for a percentage off discount) or Fixed Amount (for a $ off discount) from the discount types on offer. Then enter either the % off or $ off value that customers will receive as a discount where it says Discount value.

Step 3

You are then given 3 options: Entire order, Specific collections and Specific products. Select Entire order if you want the discount code to apply to all of the products in your Shopify Store (if you select this option, you can skip to step 6). Select Specific collections to apply your discount to selected collections in your store, and choose Specific products to apply your discount to individual products in your store.

Step 4

If you selected either Specific collections or Specific products, a Search Products tool will pop up. Click Browse to find the collections or products you want the discount to apply to. Check the box next to a product or collection to select it, and then click the blue Add button when you have finished selecting the products or collections you want. You will now see a list of all the products and collections you have selected. If you want to remove a product or collection, click the X next to it.

Step 5

If you selected either Specific collections or Specific products then you will also be shown a checkbox: Only apply discount once per order. Clicking this will mean the discount only applies to one eligible product in the order. If you don’t click this checkbox then your discount will be applied to each individual product that is eligible for the discount.

Step 6

Now enter the minimum requirements for this order. You have three options:

1. None: This means there are no minimum requirements for this discount and it will apply to all eligible shoppers regardless of how much they spend or how many items they buy.

2. Minimum purchase amount: This means shoppers will have to spend over a certain amount to receive the discount. To apply this requirement, click Minimum purchase amount and a box with a $ will pop up. Enter the minimum amount shoppers have to spend in this box.

3. Minimum quantity of items: This means shoppers will have to purchase a certain number of items to receive the discount. To apply this requirement, click Minimum quantity of items and a box will pop up. Enter the minimum number of items a shopper has to add to their cart. You will see the text Applies only to selected products below. This means the minimum quantity of items applies to products you have selected for this discount.

Step 7

Next you need to complete Customer eligibility. This is about which customers will be able to claim your discounts. Your options are Everyone, Specific Groups of Customers or Specific Customers.

1. Everyone: This is the default setting, and means all shoppers will be able to use your discount code.

2. Specific Groups of Customers: This option means your discount code will only work for a specific customer group or groups (ie. if a customer not from your specified group(s) enters the discount code at checkout, it won’t work). To apply your discount to groups, you will need to have created specific customer groups first. In your Shopify admin you can create customer groups based on:

  • How much they have spent
  • How many orders they have made
  • When they placed an order
  • When they first became a customer
  • When they opted-in to your email marketing
  • When abandoned a cart
  • What type of account they have
  • Any custom tags for segmentation you have created

You can get a full explanation of how to create customer groups here. To apply your discount to specific customer groups, select Specific Groups of Customers and click browse to see your different customer groups. Then check the box for the groups you want to include in your discount, and click Add. Your selected groups will be listed – to remove one, click the X next to it.

3. Specific Customers: This enables you to apply the discount to individual customers you select – this might be useful for customer service situations. Select Specific Customers then search for the customer using their email address or phone number. Your selected customers will be listed – to remove one, click the X next to it.

Step 8

Now you need to define the usage limits of your discount code. In other words, what, if any, are the limits to how the discount can be used by shoppers. The default setting is for there to be no limits, but there are two types of limits you can apply.

  • Total number of discount uses: You can set a limit to the total number of times the discount can be used by all of your customers. Be aware that choosing this setting still means individual customers can use this discount multiple times. To apply this limit, click Limit number of times this discount can be used in total and then enter the total number of uses in the box that pops up.
  • Number of uses per individual customer: you can also limit the discount to one use per customer. To do this, click Limit to one use per customer.

Choosing the right usage limits

The two limits available give you a range of options for controlling usage of your discount.

Option 1 – Don’t apply any limits

This would mean there is no limit to how many times your discount code can be applied, and each individual customer can use it as many times as they like.

Option 2 – Limit total number but not per individual customer

This would mean the total number of discount code uses is capped. For example, you might set the limit for uses at 500. But each individual customer can use the code as many times as they want until that total of 500 has been used by all customers.

Option 3 – Limit per individual customer but not total number

Here, each individual customer would only get to use the discount code one time. But there is no limit to the total number of customers who can use the code.

Option 4 – Limit total number and per individual customer

In this scenario, each customer only gets to use the code one time. And, with a limit on the total number of uses, this means there will only be a limited number of customers who can access the discount. Great if you want to create exclusivity or run a VIP discount.

Step 9

Decide when the code should be active. You can use the calendar to set the date and time for the discount to run. Make sure you add a start and end date (otherwise the discount will run forever). Be aware that all times will be for the timezone that is used for your Shopify admin.

Step 10

Click Save discount to complete. Your new discount code will appear in the Discounts tab in Shopify admin.

Step 11

Share the code with your customers. Now you can simply share this code in Facebook Messenger messages, SMSs, emails, or on your website. Your customers just need to enter the code at checkout to receive the discount.

How to create a Free Shipping discount code on Shopify

Step 1

Go to your Shopify admin page, and click Discounts. Click Create discount code and select Discount code. Then enter a name for the new code.

Step 2

Select Free Shipping from the discount types on offer.

Step 3

Choose the countries you want this to apply to in the Countries section. The default setting is for all countries to be selected. If you only want your free shipping offer to apply to specific countries, click Selected countries and choose the countries you want the offer to apply to. Once you have chosen, click Add and you will see the countries listed. If you add a country by mistake, click the X next to the country to remove it.

Step 4

Next you need to decide if you want to exclude free shipping for products that are very expensive to ship. To do this, click Exclude shipping rates over a certain amount and then enter the maximum shipping cost you want to include in your offer. For example, if you enter $25, then any order that costs more than $25 to ship will not receive free shipping.

Step 5

Now enter the minimum requirements for this order. You have three options.

1. None: This means there are no minimum requirements for your free shipping and it will apply to all eligible shoppers regardless of how much they spend or how many items they buy.

2. Minimum purchase amount: This means shoppers will have to spend over a certain amount to receive free shipping. To apply this requirement, click Minimum purchase amount and a box with $ will pop up. Enter the minimum amount shoppers have to spend in this box.

3. Minimum quantity of items: This means shoppers will have to purchase a certain number of items to receive free shipping. To apply this requirement, click Minimum quantity of items and a box will pop up. Enter the minimum number of items a shopper has to add to their cart.

Step 6

Next you need to complete Customer eligibility. This is about which customers will be able to claim your discounts. Your options are Everyone, Specific Groups of Customers or Specific Customers.

1. Everyone: This is the default setting, and means all shoppers will be able to use your discount code.

2. Specific Groups of Customers: This option means your discount code will only work for a specific customer group or groups (ie. if a customer not from your specified group(s) enters the discount code at checkout, it won’t work). To apply your discount to groups, you will need to have created specific customer groups first. In your Shopify admin you can create customer groups based on:

  • How much they have spent
  • How many orders they have made
  • When they placed an order
  • When they first became a customer
  • When they opted-in to your email marketing
  • When abandoned a cart
  • What type of account they have
  • Any custom tags for segmentation you have created

You can get a full explanation of how to create customer groups here. To apply your discount to specific customer groups, select Specific Groups of Customers and click browse to see your different customer groups. Then check the box for the groups you want to include in your discount, and click Add. Your selected groups will be listed – to remove one, click the X next to it.

3. Specific Customers: This enables you to apply the discount to individual customers you select – this might be useful for customer service situations. Select Specific Customers then search for the customer using their email address or phone number. Your selected customers will be listed – to remove one, click the X next to it.

Step 7

Now you need to define what, if any, are the limits to how many times your customers can receive free shipping. The default setting is for there to be no limits, but there are two types of limits you can apply.

  • Total number of discount uses: You can set a limit to the total number of times free shipping can be used by all of your customers. Be aware that choosing this setting still means individual customers can get free shipping more than once. To apply this limit, click Limit number of times this discount can be used in total and then enter the total number of uses in the box that pops up.
  • Number of uses per individual customer: you can also limit free shipping to once per customer. To do this, click Limit to one use per customer.

See step 8 of applying a percentage or $ off discount for additional guidance on setting limits to your discounts.

Step 8

Decide when the code should be active. You can use the calendar to set the date and time for the discount to run. Make sure you add a start and end date (otherwise the discount will run forever). Be aware that all times will be for the timezone that is used for your Shopify admin.

Step 9

Click Save discount to complete. Your new discount code will appear in the Discounts tab in Shopify admin.

Step 10

Share the code with your customers. Now you can simply share this code in Facebook Messenger messages, SMSs, emails, or on your website. Your customers just need to enter the code at checkout to receive the discount.

How to create a Buy X, Get Y discount code on Shopify

Step 1

Go to your Shopify admin page, and click Discounts. Click Create discount code and select Discount code. Then enter a name for the new code.

Step 2

Select Buy X, Get Y from the discount types on offer.

Step 3

The next section is Customer buys. Here you specify which items a customer needs to buy to get another for free or at a discounted rate, and how many of those items. If your discount applies to all items in your store, then just add a number in the Quantity box to show how many they need to purchase to get the offer. If your discount applies to specific products or collections, then select Specific Items in the Any items from menu. Then search for the collection or product by clicking browse or entering a product name to search for.

Step 4

In the Customer gets section, follow the same procedure as for step 3. Only this time it will apply to the product the customer receives in this deal.

Step 5

Now you will need to decide whether to offer the Customer gets item for free, or only to offer a discount on this item. Choose Free in the At a discounted value menu to give the second item for free. Or select Percentage and enter the percentage off the value of that product they will receive.

Step 6

One other consideration is whether to limit the number of times a customer can use this deal per order. If you want to set a limit, check the box named Set the maximum number of uses per order and enter the number of times a customer can use this deal in one order.

Step 7

Next you need to complete Customer eligibility. This is about which customers will be able to claim your discounts. Your options are Everyone, Specific Groups of Customers or Specific Customers.

1. Everyone: This is the default setting, and means all shoppers will be able to use your discount code.

2. Specific Groups of Customers: This option means your discount code will only work for a specific customer group or groups (ie. if a customer not from your specified group(s) enters the discount code at checkout, it won’t work). To apply your discount to groups, you will need to have created specific customer groups first. In your Shopify admin you can create customer groups based on:

  • How much they have spent
  • How many orders they have made
  • When they placed an order
  • When they first became a customer
  • When they opted-in to your email marketing
  • When abandoned a cart
  • What type of account they have
  • Any custom tags for segmentation you have created

You can get a full explanation of how to create customer groups here. To apply your discount to specific customer groups, select Specific Groups of Customers and click browse to look see your different customer groups. Then check the box for the groups you want to include in your discount, and click Add. Your selected groups will be listed – to remove one, click the X next to it.

3. Specific Customers: This enables you to apply the discount to individual customers you select – this might be useful for customer service situations. Select Specific Customers then search for the customer using their email address or phone number. Your selected customers will be listed – to remove one, click the X next to it.

Step 8

Now you need to define the usage limits of your discount code. In other words, what, if any, are the limits to how the discount can be used by shoppers. The default setting is for there to be no limits, but there are two types of limits you can apply.

  • Total number of discount uses: You can set a limit to the total number of times the discount can be used by all of your customers. Be aware that choosing this setting still means individual customers can use this discount multiple times. To apply this limit, click Limit number of times this discount can be used in total and then enter the total number of uses in the box that pops up.
  • Number of uses per individual customer: you can also limit the discount to one use per customer. To do this, click Limit to one use per customer.

See step 8 of applying a percentage or $ off discount for additional guidance on setting limits to your discounts.

Step 9

Decide when the code should be active. You can use the calendar to set the date and time for the discount to run. Make sure you add a start and end date (otherwise the discount will run forever). Be aware that all times will be for the time zone that is used for your Shopify admin.

Step 10

Click Save discount to complete. Your new discount code will appear in the Discounts tab in Shopify admin.

Step 11

Share the code with your customers. Now you can simply share this code in Facebook Messenger messages, SMSs, emails, or on your website. Your customers just need to enter the code at checkout to receive the discount.

Making your discount codes count

This blog is designed to be practical, and hopefully you now have all the tools you need to get your discount code up and running. The next step is to start perfecting this process. And this means testing. So make sure you analyse the performance of your discount codes using a Sales by discount report. And you should also be testing your communication to see what is the best way to get your discount codes out there and being used.

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