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Ecwid Ecommerce Glossary

Discount Code

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What is discount code?

Discount Code is a numeric or letter code that can be entered at checkout of an online store to get a discount off an order or a special reward.

Discount Codes are commonly used to motivate a shopper to make a purchase.

Types of discount codes

Fixed amount discount. This type of discount cuts off a predefined amount of money from customers’ orders. They are usually used to push a potential customer to make the first purchase or to attract attention to new products. Fixed discounts aren’t big as can harm the economy of the online store if they exceed the price of an item. So you will most likely see discount codes worth $10-50.

Percentage discount codes. This is another story. Percentage discounts never cross the margin threshold which makes them a safer way to improve sales. This type of discount is often used to increase the purchasing activity along with average order value because the amount of discount will grow with the order — the more you play, the more you save. The economy of large sales, like Black Friday or Cyber Monday is based on percentage discounts.

Free shipping

The discount doesn’t always imply the products’ price. Providing free shipping is another way to use discount codes. Getting something for free sometimes converts better than getting a discount, although the customer will save the same amount of money.

Time-limited offer

The effectiveness of your discount campaigns depends on many factors. But one of the most important ingredients is the availability of discounts. If your products are constantly on sale, the customers won’t feel the need to buy them now. They can go search for a better deal or options.

But when you limit the time frame, you push the shoppers to make a decision faster. The fear of missing out (FOMO) a good deal makes consumers buy now or lose the chance to save. That’s the main mechanism behind BF&CM when we have several days to buy everything we want with huge discounts or wait for another chance.

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