What is a promo code?

Promo codes (short for promotional codes; also known as discount codes, coupon codes, and offer codes) are alphanumeric codes that customers can enter during the checkout process to save money on an order. They are often used to incentivize customers to make a purchase, adding value for the customer and building loyalty for both new and returning customers. A coupon code can be applied to both one-time purchases and subscription products.

Coupon code benefits 

In addition to their money-saving benefits for customers, coupon codes serve as a valuable tracking tool for merchants. They are often used as part of a larger promotional marketing strategy to track the effectiveness of a campaign or advertisement. For example, stores can create platform-specific promotions to target the platforms that are most effective at generating conversions or site traffic. 

Categories of promo codes

There are three main types of promo codes:

  1. Fixed amount discounts subtract a specific dollar amount from a purchase. Merchants can ensure that fixed amount discounts apply to any order value, or limit them to orders that meet a specific minimum order value. 
  2. Percentage discounts offer a specific percentage off the purchase amount. For example, a store might offer a discount code for 15% off some purchases, such as all their subscription options.
  3. Shipping discounts provide reduced-price or free shipping for an order. For example, Amazon Prime offers free expedited shipping for members on eligible items—a brand could offer a similar benefit for select items on their store using a promo code.

Merchants can place a variety of limits on promo codes. For example, codes can be limited to a specific time frame, first-time purchases, a certain number of customers, or customers with member status. Merchants can also set limits on whether the same promotional code can be used more than once by the customer.