A repository of acronyms, jargon, and useful definitions perfect for eCommerce founders & marketers like yourself.

Discount Code

Discount Code

Discount codes are popular and great ways to drive sales for your ecommerce store. They are combinations of alphabets, numbers and signs that allow customers to avail a cut in the price of your product during checkout. For example, if you activate a discount code “FLAT 50%” for a customer, they can visit your online store, add something to the cart and apply the code at checkout to buy the product at half the price (basis the conditions you’ve set for the code). 

While there might be many possibilities of discount codes, below are some of the most common ones: 

  • Discount by Percentage: As the name states, these offer a flat percentage discount on the product at checkout. The above mentioned discount code falls under this category.

  • Free Shipping Codes: When applied, the customer can eliminate the cost of shipping the product to their desired destination using this discount code.

  • Fixed Dollar Discount: Under this type, the discount is a fixed amount rather than a percentage of the price. For example, if such a code was applied, say of $50, at checkout, the final cart value would be $50 less than the original amount.

  • Time Bound Discount Codes: Here, the type of discount can be any of the above but is valid only for a limited time period or during certain times of the day. For instance, an NYE discount code would be valid for only one day and can be availed by the customer before the clock turns 12.

  • Discount on Specific Products: Another very commonly used discount code which applies to a single product or a single type of product. This can be used to promote the sale of a new product, clear the stock of a product or boost sales of a line of products. 

Why Do Stores Provide Discount Codes? 

Discount codes are generally used to drive more sales or conversions on an online store or a physical shop. However, they can benefit in different scenarios: 

  • They can be used as an incentive to drive referrals
  • They are offered as a means of winning back abandoned customers
  • They are a great way to drive repeat buys i.e. customer retention
  • They also help gauge the ideal price point of a product
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