Promotional codes are alphanumeric strings that online stores offer to encourage purchases on their website and are typically associated with an overarching promotional marketing strategy. The discount associated with a promo code can apply to individual products or an entire order. Promo (or coupon) codes are used to give customers an amazing discount. They are usually around five to 10 characters in all caps and sometimes appear random (e.g., FT596RFT); other times they spell out actual words or portions of words (e.g., FREESHIP50). The code itself can give clues as to what kind of discount it provides. For example, FREESHIP50 would likely be free shipping with a $50 minimum purchase.

Types of Promotional Code:

Most often, you’ll see online coupon codes cover the following types of discounts:

• X% off: Codes for these discounts take a certain percentage off and can apply to your whole order, or only select items.
• $X off: These will take a fixed dollar amount off your order. Alternatively, they could apply to one single item.
• Shipping: These coupons tend to offer free or discounted shipping on your order, and will often look like “FREESHIP” or something similar.
• Bonus item: These codes will usually add a free gift (with certain purchases) to your order. They tend to reflect whatever the gift is, so a code like “FREETOTE75” could be for a free tote with a $75 purchase.

While any of these code types could be applied to no-minimum purchases, that doesn’t always happen. Online coupons commonly require a minimum order amount in order to be redeemed. In other words, you have to spend a certain amount on eligible items before you can receive the discount.

Also know that codes can apply to most items a store sells, or only to specific items or categories. Additionally, you can get some discounts automatically at checkout without a code, while other times you must click through a certain link.

Why do promotional codes work?

When a store issues promotional codes, they’re providing customers with an incentive to buy, which benefits both the customer and the business. Customers get the products they want for a lower price, and the ecommerce store generates revenue. One of the most useful things about promotional codes is that they work well with both new and returning customers. These incentives even have a direct impact on the overall shopping experience, according to research conducted by the Center for Neuroeconomics Studies at Claremont Graduate University.