Create different types of discount codes on Shopify

More than just price cuts, discount codes are powerful levers for boosting sales, acquiring customers, and increasing average order value (AOV).

In fact, a study by Capital One Shopping found that consumers are twice as likely to buy a product with a 20% discount as they are to buy one at full price. This means the right discount code strategy can tip the scales in your favor at just the right moment.

But not all discounts are created equal.

Shopify gives you a range of discount codes and types to play with — from simple codes to automated promotions. Knowing how to use them effectively is where the real impact lies.

In this guide, you'll learn how to create and manage different types of discount codes in Shopify, understand their configuration options, and explore advanced tools like Barn2 Bundles & Bulk Discounts to take your promotions further.

Understanding manual and automatic discounts and Shopify’s limitations

Shopify offers two core types of discount mechanisms: manual discounts and automatic discounts. Each has its strategic strengths and limitations that can significantly affect your promotional campaigns.

Here’s a quick overview of both discount types:

• Manual discounts require customers to input a Shopify discount code at checkout. This approach is best suited for targeted promotions, such as exclusive email campaigns, influencer codes, or loyalty rewards. Discount codes give store owners greater control over who can access the offer and when.
• Automatic discounts are applied without customer action once certain conditions are met, like the minimum cart value or the presence of a specific product. These are ideal for broad seasonal sales or storewide promotions where frictionless application can lead to better conversions.

Key differences

Manual discount codes and automatic discounts are different in these key ways:

• Performance. Automatic discounts generally see higher redemption rates due to the frictionless user experience. However, they offer less granular tracking than manual codes.
• Control. Manual discount codes give businesses more flexibility in how and where codes are distributed. Automatic discounts focus on simplicity and speed.
• Customer experience. Auto-applied discounts create a smoother checkout process, reducing drop-offs caused by forgotten or missed codes.

Shopify’s built-in limitations

While Shopify’s native discount tools are useful, they fall short for more complex discounting strategies.

Manual discount code limitations

Automatic discount limitations

But what if you need more flexibility?

If your store needs tiered price breaks or quantity pricing, combination logic, or exclusions, then Shopify's native tools may not be enough. We recommend considering third-party solutions like Barn2 Bundles & Bulk Discounts to create smarter, more tailored discount campaigns.

How to set up different discount codes in Shopify

Setting up discounts in Shopify is a straightforward process. First, here's how to create either a manual discount code or an automatic discount, without apps:

1. From your Shopify admin, go to Discounts.
2. Click Create discount.
3. Choose from the four available discount types: Amount off products, Buy X get Y, Amount off order, or Free shipping.
4. Select whether it will be a Discount code (manual) or an Automatic discount.
5. Enter a unique discount name (for manual codes, this is what customers will enter at checkout).

Next, define the conditions for your discount:

1. Validity dates to control when the discount can be used.
2. Usage limits, such as the number of times a code can be used in total or per customer.
3. Minimum order requirements before the discount activates.
4. Specify which products, collections, or variants the discount applies to.
5. Decide if the discount can be combined with other discount types.

Once configured, click Save to activate your discount.

Create percentage-based discounts

To create percentage-based discounts in Shopify, start by selecting either the Amount off products or Amount off orders discount type. Then, under Value, choose Percentage and enter the desired discount rate.

Strategic tips:

• Optimal ranges. Offer 10%-15% discounts for new customers to encourage first-time purchases, and 20%-30% for major sales or clearance events.
• Targeting. Apply discounts to specific collections to drive sales in targeted categories, or set store-wide percentages for broad promotions.
• Branding. Use memorable, branded discount codes like SUMMER25 to reinforce your marketing campaigns.
• Pitfalls. Avoid setting excessively high minimum purchase requirements, as this can discourage customers from completing their orders.
• Exclusions. Consider excluding already discounted items or specific collections to protect profit margins.

For more advanced setups, check out our guide on implementing quantity discounts in Shopify.

Create fixed-amount discounts

To create a fixed-amount discount in Shopify, select either the Amount off products or Amount off orders discount type. Then, under Value, choose Fixed amount and enter the dollar amount you want to deduct.

Strategic tips:

• When to use fixed discounts. Fixed discounts work best for lower-priced items, where $5 off a $30 purchase often feels more tangible than a percentage discount.
• Clear value. Fixed discounts clearly communicate savings, which can improve customer motivation and trust.
• Thresholds. Set minimum purchase amounts carefully to protect your profit margins while still offering an attractive deal.
• Urgency. Use limited-time fixed discounts to create urgency and encourage quicker buying decisions.

For more advanced discount strategies, check out our guide on setting up bulk discounts in Shopify.

Create Buy X Get Y discounts

To create a Buy X, Get Y discount in Shopify, select the Buy X get Y discount type. Then configure the offer by setting:

• Customer buys. The minimum quantity of items or purchase amount required.
• Customer gets. What the customer receives in return such as a free product or a discounted item.

Strategic tips:

• Product pairing: Pair complementary or related items to encourage cross-category sales.
• BOGO deals: Use Buy 2, Get 1 Free offers to boost average order value.
• Promote products: Leverage BOGO discounts to push slow-moving inventory or seasonal stock.
• Avoid confusion: Keep conditions simple to prevent customer misunderstandings and frustration.

Want to take it further? Learn how to automatically add free gifts to the cart in our comprehensive guide.

Create free shipping discounts

To create a free shipping discount in Shopify, select the Free shipping discount method. Choose whether it will be a manual discount code or an automatic discount, then set the conditions:

• Countries. Select the countries where the free shipping applies. Choose All countries or specific ones.
• Minimum purchase. Set a minimum order amount to qualify for the free shipping discount.
• Exclusions. Optionally, you can exclude shipping rates over a certain amount or restrict to specific purchase types.

Strategic tips:

• Eligibility control. Limit free shipping to selected regions to manage shipping costs effectively.
• Exclusions. Exclude heavy or high-cost items to protect margins.
• Checkout promotion. Clearly display free shipping messages at checkout to boost conversions and reduce cart abandonment.

Advanced discount management with Barn2 Bundles & Bulk Discounts

While Shopify’s built-in discount tools offer the basics, they fall short when it comes to advanced customization, automation, and bulk operations.

That’s where third-party apps like Barn2 Bundles & Bulk Discounts come in. Whether you need to set up tiered pricing, volume-based discounts, or multi-condition logic, this app streamlines your entire discount strategy without relying on workarounds or manual setups.

Why use a dedicated discount app?

Although Shopify allows you to import bulk discount codes via CSV, managing and optimizing them manually can be time-consuming and prone to error. Barn2 Bundles & Bulk Discounts simplifies this with a user-friendly interface and powerful automation.

What is Barn2 Bundles & Bulk Discounts?

Barn2 is known for building flexible, conversion-boosting tools for ecommerce platforms. Our Barn2 Bundles & Bulk Discounts Shopify app is designed specifically for merchants who need more powerful discounting capabilities without compromising ease of use.

Key features

• Choice of tiered bulk pricing or volume discount bundles.
• Automatic BOGO & combo deals.
• Cart condition logic (e.g. spend X, get Y discount).
• Inclusion or exclusion rules for products/collections.
• Create unlimited numbers of discounts in Shopify (no 25 limit!).
• Bulk discount generator with import/export support.

How to set up advanced discounts with the app

1. Install Barn2 Bundles & Bulk Discounts from the Shopify App Store.
2. In your Shopify dashboard, go to the Barn2 Bundles & Bulk Discounts section.
3. Choose a discount type: volume bundles or bulk pricing.
4. Define rules: eligible products, minimum purchase, schedule dates, etc.
5. Preview, customize, and then save your discount setup.
6. (Optional) Generate and export discount codes in bulk if needed.

As you can see, the Barn2 Shopify discount code app is ideal for merchants ready to move beyond basic promotions and implement smarter, more profitable pricing strategies.

Best practices for discount code management

Effectively managing discount codes is about aligning every discount with your business goals while protecting your margins and brand value.

Here are some best practices to help you get it right:

1. Set clear objectives

Define the goal of each discount before launching it. Are you trying to acquire new customers, reward loyal ones, or reactivate dormant accounts? Tailoring your discount strategy to a specific purpose ensures focused, measurable outcomes.

2. Implement smart restrictions

Avoid abuse by setting minimum purchase amounts, usage limits, and expiry dates. One-time use or customer-specific codes add exclusivity and urgency. This makes the offer more compelling while protecting your bottom line.

3. Monitor performance closely

Track which discount codes drive the most revenue or conversions. Watch for red flags like sharp margin declines or low average order value. Use Shopify reports or third-party analytics tools to get granular insights.

4. Test strategically

Run A/B tests with different discount values, types (percentage vs. fixed), and eligibility conditions. This allows you to fine-tune your approach and find the sweet spot between conversion and profitability.

5. Time appropriately

Deploy discounts during key seasons, product launches, or sales events. Avoid constant discounting, which can train customers to wait for sales and reduce perceived value.

6. Create personalized campaigns

Use Shopify discount codes in targeted email marketing, for example, by offering exclusive discounts for first-time buyers, newsletter signups, or VIP members. Personalization increases redemption rates and strengthens brand loyalty.

Remember, smart discount code management turns promotions into strategic growth tools.

Take your discount management to the next level

Shopify’s built-in discount tools are great for basic promotions. But, as your store grows, so do your discounting needs.

From percentage-based and fixed-amount discounts to BOGO offers and free shipping, this guide covered the key discount types you can set up natively in Shopify.

However, if you want to go beyond simple setups — like stacking discounts, adding advanced rules, or generating bulk discount codes — you’ll need a more powerful solution.

That’s where tools like Barn2 Bundles & Bulk Discounts come in. This Shopify discount app simplifies complex discount logic, offers deeper customization, and helps you run smarter, more effective campaigns without the manual overhead.

Ready to streamline your workflows and increase conversions? Try Barn2 Bundles & Bulk Discounts today and unlock the full potential of your Shopify discount strategy.