Shopify Discount Codes: 4 Types of Discounts, Advantages, and How to Create Discounts on Shopify

If your goal is to have your Shopify store buzzing with activity and has skyrocketing sales from happy customers, Shopify discount codes have the power to turn this goal into reality. 

Discounts are the secret sauce that can turn a casual browser or a one-time buyer into loyal customers. And, if you’re open to experimenting and learning what discounts can do for your business, you’re in luck because there are many advanced and user-friendly tools, including Shopify’s built-in feature to help you create and manage your Shopify discount codes.

Each Shopify plan allows for discounts and the creation of Shopify discount codes. Whether you are offering a hefty dollar value discount, a tempting percentage off, a Buy X, Get Y deal, or the ever-popular free shipping, Shopify has you covered. In this article, we’ll explore the different types of Shopify discount codes and guide you through creating your discount codes. Bonus – we’ll also share some tips on managing and using these Shopify discount codes effectively to drive your sales.

Types of Shopify Discount Codes

Shopify discount codes are as diverse as the products they apply to. Let’s delve into the different types of Shopify discount codes you can create on Shopify.

1. Dollar Value Discount: A dollar value discount is a straightforward, easy-to-understand discount. These are the ‘SAVE10’ discount codes and are a staple in many online stores. This type of Shopify discount code could be associated with a minimum purchase order, on the first purchase, on every purchase for the duration of your sale period, or to encourage repeat purchases by enabling it for use on a later purchase. 
2. Percentage Discount: Percentage discounts are those where the amount that is being discounted is a percentage of the original price. The discount is usually calculated on the value of the product before tax. For example, if you’re providing a 15% discount on a $100 product, your Shopify discount code can be “SUMMERSALE15OFF,” and the customer will pay you $85 (plus applicable taxes on $$85.) Like dollar value discounts, these discounts can be associated with a minimum purchase order, on the first purchase, on every purchase for the duration of your sale period, or to encourage repeat purchases by enabling it for use on a later purchase. 
3. Buy X Get Y Discount: Ever come across a ‘Buy 2 Get 1 Free’ or a ‘Buy for over $100 and get a surprise gift for free’ deal? These are the ‘Buy X Get Y’ discounts. These discount types are usually used to encourage customers to buy more products and increase the order value of purchases, or in the case of a buy-one-get-one, to simply clear inventory of a slow-moving product or to entice people to try a new product. The Shopify discount code could be something like ‘BOGODEAL’ for this type of discount. 
4. Free Shipping Discount: Shipping is one of those things that no customer likes to pay for and also establishes a certain level of trust for the brand in the minds of consumers. Research shows that 61% of online shoppers have abandoned a purchase due to shipping costs. So, you may want to err on the side of caution when it comes to free shipping. In addition to being essential to achieving purchase completion, this discount code can also be used to increase order value when the offer is tied to a minimum spend. You could use a Shopify discount code like ‘FREESHIPPING’ to make it easy to remember and use. 

Whatever discount type you want to have, one important thing to do while creating your Shopify discount codes is to check for conflicts. If you have multiple active Shopify discount codes, make sure they don’t conflict with each other. For example, you don’t want two discount codes offering a 20% discount on the same product.

Creating a Discount Code in Shopify

There are 2 methods that you can use to create your Shopify discount codes. 

1. Using the Shopify built-in feature
2. Using third-party apps like ADG

Creating Shopify Discount Codes using Shopify’s Built-In Discount Functionality

Steps to create a fixed percentage, value Shopify discount code

1. From the Shopify Dashboard, go to Discounts
2. Click Create Discount
3. Enter a name for the new discount code 
4. To generate a random discount code, click Generate Code
5. In the Types section, select the discount type you want to create. This can be a monetary or percentage value
6. In the Applies to section, select what the discount will apply to. It can be an entire order, collections, or products
7. Use the search field or Browse button for specific collections or products to add them to the discount
8. In the Customer Eligibility field, select who the discount applies to. It can be everyone, specific groups, or individual customers.
9. To limit usage, check one of the available options in the Usage Limits section.
10. Use the calendar in the Active Dates section to set the start and end date for the discount. If you don’t choose an end date, the discount will remain active until you do.
11. Click Save Discount, and the process is complete.

Steps to create a free shipping discount code on Shopify

1. From the Shopify Dashboard, go to Discounts.
2. Click Create Discount
3. Enter a name for the new discount code 
4. To generate a random discount code, click Generate Code
5. In the Options section, select the Free Shipping discount type.
6. In the Countries section, leave All Countries selected or limit the free shipping to certain countries.
7. In the Customer Eligibility field, select who the discount applies to. It can be everyone, specific groups, or individual customers.
8. To limit usage, check one of the available options in the Usage Limits section.
9. Use the calendar in the Active Dates section to set the start and end date for the discount. If you don’t choose an end date, the discount will remain active until you do.
10. Click Save Discount, and the process is complete.

Steps to create a Shopify discount code to offer a buy X, get Y discount:

1. From the Shopify Dashboard, go to Discounts.
2. Click Create Discount
3. Enter a name for the new discount code 
4. To generate a random discount code, click Generate Code
5. Select the Buy X Get Y discount type in the Options section.
6. Configure the following settings in the Customer Buys section:
   1. Choose the minimum quantity of items or minimum purchase amount
   2. Set the number of items or amount the customer must spend to be eligible
   3. In the Any Items From section, choose whether to include products or collections in the qualifying items.
   4. Use the search field or browse button to add products to the promotion.
7. Configure the following settings in the Customer Gets section:
   1. Set the number of items in the cart that trigger the discount
   2. In the Any Items From section, choose whether to include products or collections as discounted items. If the product or collection is the same as the one set in the Customer Buys section, the lower-priced item will be the item discounted
   3. Use the search field or browse button to add products or collections.
8. In the At a Discounted Value section, choose the discounted value customers receive when they buy a set number of items. If you want to offer a percentage discount, select a percentage and enter a rate. If you want to offer items for free, select Free.
9. In the Customer Eligibility field, select who the discount applies to. It can be everyone, specific groups, or individual customers.
10. To limit usage, check one of the available options in the Usage Limits section.
11. Use the calendar in the Active Dates section to set the start and end date for the discount. If you don’t choose an end date, the discount will remain active until you do.

Click Save Discount, and the process is complete.

Creating Shopify Discount Codes using Third-Party Shopify Discount Code Apps

Consider a Shopify app like Automatic Discounts & Gifts to add flexibility and robustness to your discount strategy. It allows you to set up advanced discount rules and automate them based on various conditions.

Steps to create Shopify discount codes on a third-party app (in this case, ADG) 

1. Log into Your Shopify Admin dashboard. This is your control panel for everything to do with your Shopify store, so it’s where you’ll create the discount codes
2. Navigate to the Discount Code section on the left-hand side of your dashboard
3. Click Create Discount, then Discount Code. Here, you’ll enter the code you want your customers to use. It’s good practice to have a Shopify discount code that is memorable and related to your discount
4. Next, you’ll define what the discount code will do. Here are a few ways you can offer discounts via the Automatic Discounts & Gifts app and links to the step-by-step guides on how to go about creating a specific type of Shopify discount code:
   • Creating new customer discounts
   • Creating free shipping discounts
   • Creating buy-one-get-one discounts
   • Creating tiered discounts
5. Once you’re happy with the settings, click Save
6. Lastly, it’s best always to test the Shopify discount code to ensure it’s working as expected

Managing Discount Codes in Shopify

Now that you know how to go about creating the different types of Shopify discount codes, let’s explore how you can update and manage your discount codes in Shopify.

1. Navigate to the Discounts section in your Shopify admin dashboard. This is your control center for all your discount codes.
2. Once you’re in the Discounts section, you’ll see a list of all your active Shopify discount codes. Select the one you want to manage. This will open up the details of the discount code.
3. Click on Edit to make changes to your discount code. Whether you want to adjust the discount value, extend the active dates, or change the eligibility criteria, you can do it all here.
4. Save your changes

Conclusion

Discount codes can be a powerful tool when strategized right. Now that you know the different types of Shopify discount codes and how to create/ manage them, the next step is to incorporate them into your marketing strategy and watch your e-commerce business thrive.