How to Create Discount Code in Shopify?

Discount codes play a critical role in e-commerce to drive sales, boost customer loyalty, and incentivize first-time purchases. Whether you're running a flash sale, launching new products, or simply trying to clear out old inventory, Shopify makes it easy to create and manage discount codes specific to your goals.

Shopify helps you to apply four different types of discount codes as per your needs, from product to shipping discounts. Steps to apply discounts and also know about the difference between the manual and automatic discounts.

You can use different discount strategies that help you succeed in your discount campaign and boost revenue with increased sales. Sometimes, you might encounter common issues that decrease the performance of your discount campaign and impact your sales and customer engagement.

What are Discount Codes in Shopify?

Discount codes in Shopify are special codes that customers can enter during checkout to receive a specific type of discount on their order. These codes are created and managed by Shopify store owners to increase sales with incentivized purchases, attract new customers, reward loyal buyers, or clear out inventory.

Store owners manage these discount codes from their Shopify store dashboard, like the start and ending date or time of discount code events. This creates a sense of urgency and motivates customers to make purchases to get the benefits of these discount codes.

What are the different types of Discounts?

Shopify allows you to create different types of discount codes based on your specific needs. Here are the discount types you can create from your Shopify dashboard.

Percentage Discount: The specific percentage off the price of selected products, collections, or entire orders offered as a discount. For example, a 20% discount in $200 products allows customers to save $40 and reduce the final price to $160.
Fixed Amount Discount: A specific dollar amount is subtracted from the price of individual products or the total order.
Buy One Get One Free: Customers get another item for free while purchasing one, which encourages customers to get 2 items at the price of one.
Free Shipping: Removes shipping charges for qualifying orders, often based on criteria like minimum spend or specific products. It is best for brands with premium products, as it allows them to offer discounts without decreasing the premium item price.

Step-by-Step Guide to Create a Discount Code in Shopify?

Here are the steps to create a discount code in Shopify.

Navigate to your Shopify admin and go to the Discounts.
Click on Create discount.
A menu will appear, and select the discount type according to your preference.
Under the Method section, select Discount code.
Enter a name for your discount code or click Generate code to create a random code.
In the Value section, choose either Percentage or Fixed amount and enter the discount value.
Set a minimum purchase requirement.
Now schedule the discount, like starting and ending time or date.
Click Save discount to create the discount code.

How to Apply Automated Discount in Shopify?

Automated discounts are price reductions that apply automatically based on rules set by the store, and there is no need to enter a coupon or promo code to customers to get a discount. These discounts kick in when certain conditions are met, like adding specific products to the cart or reaching a minimum order value. These types of discounts help merchants create a seamless shopping experience while offering valuable deals. Here are the steps to create an automated discount in Shopify.

Go to the Discounts section in your Shopify admin.
Click on the Create discount button.
Now select the discount type from the menu as per your preference.
Under the Method section, select Automatic discount.
Enter the title of your discount code, like Time to Save.
In the Discount Value section, choose either Percentage or Fixed amount and enter the discount value.
Set a minimum purchase requirement and usage limit.
Now, in the Active date section, set the starting and ending time.
Click “Save discount” to activate an automatic discount.

What Are the Differences Between Manual and Automatic Discount?

The differences between manual and automatic discounts primarily revolve around how they are applied and managed.

Feature	Manual Discount	Automatic Discount
Application Process	Customers enter the code manually during the checkout process.	Applied automatically based on predefined rules and triggers.
Setup	Set up individually for each customer, often down at the spot at checkout.	Set up once in the system and run automatically for all qualified transactions.
Flexibility	It can be modified to specific customers or situation.	Works on predefined rules and triggers, which makes it less flexible.
Error Risk	It has a higher risk of errors due to manual entry.	Minimum mistakes because of automated processes.
Ideal Use Case	Best for targeted promos and influencer codes.	It is best for seamless storewide offers.
Customer Experience	Requires customers to enter discount codes and wait for the discount to apply, which frustrates shoppers.	Discounts are applied automatically at checkout, speeding up the process and improves the customer shopping experience.

Best Discount Code Strategies to Boost Sales

Creating a discount for your store is just the first step, after this, you need to promote these codes to your customers. Here are the three best strategies or ways to promote discount codes.

Create a Discount Timer

Your discount codes will be more successful when customers feel a sense of urgency. A countdown timer on your website or within promotional emails creates urgency, motivating customers to make purchases before the offer expires. This counter creates a FOMO with a limited-time offer. This strategy is best for flash sales, hourly deals, and limited-time product launches.

Inform Customers via Push Notifications

Push notifications are the best choice to reach a wider audience through mobile-friendly and highly visible channels. It is cost-effective and provides higher visibility and greater immediacy than email, making it effective for flash sales and limited-time promotions such as those during the Black Friday weekend or Cyber Monday. Provide notifications based on customer behavior, location, and preferences for higher engagement chances.

Share Discount Codes via SMS

The speed of SMS ensures that the discount codes deliver faster and allows customers to react faster with its effective channel. This makes it perfect to drive sales to your Shopify store during hot sales like Black Friday or Christmas.

When sending SMS to your customers, make sure that it aligns with your deals and tailors the discount code to specific audiences. This strategy ensures that your discount code is sent to the customer's phone directly, which increases the chances of generating sales and getting attention.

What are the Common Issues that Occur While Creating the Discount Code?

Creating discount codes can be a powerful marketing strategy, but it also comes with a range of common issues that can reduce their effectiveness or cause frustration for both you and your customers.

Sharing Ineligibility: Sometimes, discount codes are intended for specific customers and groups shared with ineligible users. This decreases the effectiveness of discount codes and leads to confusion and cart abandonment.
Customer Forgot to Use Codes: Customers often miss out on intended savings because they forget to apply discount codes at checkout, which can lead to dissatisfaction with their purchase and less satisfaction with the shopping experience.
Invalid Coupon Code Error: Sometimes, customers get an error message, which leads to frustration and cart abandonment. Codes that are easy to enter and clearly communicated can reduce these errors.
Lack of Clear Goals and Targeting: Without proper distribution, discount codes may not drive the desired traffic. This results in wasted promotional spend and missed opportunities for first-time purchases, clearing overstock or older inventory.
Insufficient Testing: Failure to test codes properly before launch can lead to technical glitches, such as codes not applying correctly or conflicting with other promotions. This leads to poor customer experience and impacts the brand's image.
Expiration Date: Expired codes are a common source of frustration. Customers may attempt to use outdated codes found online, only to be met with rejection at checkout, which can lead to negative perceptions of the brand.