How Ecommerce Coupon Codes Can Boost Your Holiday Sales

Published on August 10, 2022
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Filed under Shipping Basics
Read time 9 Minutes

Saving money can be a rush. It’s why “extreme couponing” is a thing.

In the past, bragging rights were earned by proclaiming how much you spent on a product. Now you’re much more likely to impress a group when you advertise how much you saved.

So if you want to bring shoppers to your retail site this holiday season, you better be offering some stellar promo codes. Here’s what you need to know about ecommerce coupon codes and the benefits you can expect from providing them.

Promo Codes 101

Ecommerce Coupon Codes

The tried-and-true promo codes offer either a dollar amount or percentage discount on a product category or purchase total. And while these are effective, they aren’t your only options. For example …

If you decide to adopt the free-gift-with-purchase strategy, you actually have a couple ways to approach it:

  • Create a promo code offering the same gift to all shoppers, regardless of what they purchase. One idea is a branded t-shirt (Yay free advertising!). Make sure it’s high quality and allow the consumer to choose their size. Few of your customers will want a 3XL shirt made of cheap polyester. But if it’s a gift your shoppers appreciate, they’ll develop a positive association with your brand and feel more motivated to shop in the future.
  • Provide different gifts based on the amount spent — i.e., the more a consumer spends, the more expensive the gift. Again, make sure the higher tier gifts are valuable enough that the customer feels justified in spending more. Also, don’t make the price difference too extreme. If the first threshold is $50 and the second is $100, you’re going to have to offer a pretty cool gift if you want a shopper to spend double what they’d planned.
  • Offer a mystery gift. Who doesn’t love a surprise? OK, not everyone loves surprises. But University of Miami researchers found that when a consumer was on the fence about making an emotionally-motivated purchase, they were more likely to buy if they were offered a free gift without knowing what the gift was.

Benefit #1: Build Loyalty with Your Existing Customers

Ecommerce Customer Loyalty

Experts may disagree on the actual ratio, but their conclusion is the same: It is more expensive to acquire a new customer than to retain an existing customer.

This isn’t to say you shouldn’t use promo codes to bring in new holiday shoppers — you absolutely should. But you should also use ecommerce coupon codes to hold onto the customers you have. After all, loyalty is a two-way street. Consumers won’t be loyal to a brand if the brand doesn’t show its loyalty to them.

Be sure you emphasize the exclusive aspect of the promo code. Loyalty program members should know that not everyone has access to the deal and that only they, your VIP customers, get to take advantage of the promotion.

More importantly, the offer should legitimately be something only loyal customers receive. If you email a 25% off coupon code to your existing customers but then advertise a promo code for the same deal on your homepage, your current customers aren’t going to feel very VIP-esque. In fact, it will likely hurt their impression of your brand.

But if the holiday promotion is actually restricted to shoppers who regularly frequent your store, shoppers will be encouraged to continue being loyal to (and spend more money with) your business.

Benefit #2: Attract New Customers

Attract Ecommerce Customers

Humans are biologically programmed to be risk-averse. Our caveman and cavewoman ancestors understood unnecessary risks could lead to serious injury or even death.

Offering consumers a coupon code for a discount on their first order reduces their risk-aversion. The discount means they’re not investing as much in a product they might not even like. As a result, you can convince them to give your shop a shot. And the numbers back this up: 86% of shoppers say coupons have influenced them to try a new product.

Interestingly, FOMO (fear of missing out) is also related to our primal survival instincts. Five million years ago FOMO didn’t mean being disappointed because you didn’t hear about a party; it meant starving because you didn’t hear about a new source of food.

When you provide the promo code to first-time customers, give it an expiration date. And make sure you highlight the temporariness of the deal. Even if the shopper doesn’t find anything they want, they may see something they could give as a present.

Benefit #3: Outperform Your Competition

Beat Ecommerce Competition

The world of online retail is already dog-eat-dog. And when the holidays roll around, it can be especially ferocious. But ecommerce coupon codes can help you poach consumers from your competition (and also keep your competitors from poaching your customers.)

Over 70% of shoppers say percentage discounts have the greatest impact on their holiday purchasing decisions. And 63% of shoppers claim a coupon will convince them to make them a purchase if they are undecided. Do a little reconnaissance and see what deals your competitors are promoting. If they’re offering 15% off, provide a promo code with a 20% discount. It may only mean a few extra dollars off but it’s likely enough to sway a consumer who’s comparison shopping.

Another effective tactic is to calculate the actual dollar amount of your competitor’s percentage discount and then offer a coupon code for that amount off. For example, if your competitor’s 15% promotion equates to a $10 discount, then provide a promo code for $10 off. Shoppers are getting the exact same deal, but because customers tend to not be so great at that whole “calculating percentages” thing, they’ll be more attracted to a discount that doesn’t require math to understand.

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Everyone loves a good deal — especially online shoppers. In fact, consumers redeemed a coupon code in 20% of online sales in 2016. If you make sure your site is the source for the best discounts, you can drive more shoppers to your store this holiday season and more than make up for the dollars you deducted upfront.

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Written by

James Messer

James Messer is a copywriter specializing in shipping, logistics, and ecommerce.

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