Discount code or automatic discount: which suits an online shop?
Both lower the price, but they do different jobs. A code is a key you hand to someone; an automatic discount is a price everyone sees. Choosing the wrong one either gives margin away to people who would have paid in full, or hides a sale from the visitors it was meant for.
When a discount code works better
- Targeting: only people who received the code get the discount, so full-price buyers keep paying full price.
- Measurement: a separate code per channel, such as NEWS10 for the newsletter and PARTNER10 for a partner, shows which channel drove the order.
- Control: a code can have an end date or a limited number of uses and can be switched off without touching product prices.
- The downside: codes leak to coupon websites, and a visible code field makes some buyers leave to search for one.
When an automatic discount works better
- Conversion: the lower price is visible on the product page, with nothing to type and no reason to leave the checkout.
- Clearing stock: last season's items or discontinued sizes sell faster when every visitor sees the reduced price.
- The downside: everyone gets it, including buyers who would have paid in full, and you cannot tell which channel brought them.
If you show a price reduction to consumers in the EU, the rules on price indication generally require you to state the lowest price of the previous 30 days as the reference price. Check the details for your country before you announce a sale.
An example (illustrative numbers)
A shop sells a jacket for 120 EUR. For the newsletter it creates the code NEWS10 for 10% off, valid for two weeks: subscribers pay 108 EUR, and every order with the code can be traced to the newsletter. At the end of the season the remaining jackets are reduced to 90 EUR for everyone, and the product page shows the old price and the lowest price of the last 30 days. The code is switched off for the clearance so the two discounts do not stack.
How it works in OrgLines
The OrgLines website builder includes discount codes for buyers as part of the store, alongside shipping methods and tax settings. For a price that every visitor sees, you can give a product a different web price than in the ERP catalogue, because the shop's catalogue is a selection from the ERP where name, price and image can be adjusted for the site. Shipping methods also support free delivery above a basket threshold, which is another way to reward larger orders without a code.