Do Promo Codes Increase Sales? What the Evidence Says (2026)
Updated 16 October 2026 · PromoCodes.com.au team
Do Promo Codes Actually Increase Sales?
What controlled experiments, checkout research and shopper surveys say about discount codes — and how an Australian online store can get the upside without giving away margin it didn’t need to.
Ask ten store owners whether promo codes are worth it and you’ll get ten confident answers. Some swear a welcome code doubled their first orders; others say codes just hand a discount to people who were going to buy anyway. Both can be true — it depends on who gets the code, when, and whether you measure it properly.
This guide sticks to evidence we could actually trace back to a source. Every figure below links to where it came from, with the year noted so you can judge how current it is. Where the research is thin, old or produced by a company with something to sell (including coupon sites like ours), we say so.
Key Takeaways
- Discount offers can lift total spending, not just redemptions. In 70 randomised experiments, emailed offers raised average spend by 37.2% during the promotion — and most of the extra spend didn’t even use the code.
- Deep discounts help win new customers but can train existing ones to wait. Field studies found opposite long-run effects for first-time and established customers.
- Shoppers hunt for codes either way. A visible promo code box can send them off to Google mid-checkout — and some won’t come back.
- The main risk is paying for sales you’d have made anyway. Code-level tracking and a simple holdout test tell you whether a code is adding sales or just subsidising them.
In This Guide
What the Research Says
The strongest evidence on discounts comes from randomised field experiments, where a business sends an offer to one group and deliberately withholds it from a comparable group. That’s the only clean way to separate sales a discount caused from sales it merely coincided with. There are fewer of these studies than blog posts suggest, but the ones that exist are useful.
37.2%
Increase in average spend during the promotion window (Sahni et al., 2017)
90%
Of that extra spend didn’t come from redeeming the offer itself
70.22%
Average documented cart abandonment rate (Baymard Institute, 2026)
Conversions and spend
The most cited controlled study is “Do Targeted Discount Offers Serve as Advertising?” by Navdeep Sahni, Dan Zou and Pradeep Chintagunta, published in Management Science in 2017. The researchers analysed 70 randomised experiments run by a large online ticket resale platform, comparing customers who were emailed a discount with customers who, by random chance, weren’t.
The offers increased average spending by US$3.03 per person — a 37.2% lift — during the promotion window. The surprising part: redemption rates were low, and around 90% of the extra spending did not come through people redeeming the offer. Spending also stayed higher (by US$1.55) in the week after the offer expired, and offers spilled over into categories the discount didn’t even cover. The authors’ conclusion is that an emailed offer works partly as advertising — a reason to think about the store — not only as a price cut.
What this means for you
Counting how many times a code was redeemed can badly underestimate (or overestimate) its effect. If an offer email nudges people back to your store, plenty of them may buy full-price items without typing the code. The only way to see that is to compare against a group who didn’t get the offer. One caveat: this is one US business selling event tickets, so treat the exact percentages as an example rather than a benchmark for your category.
New customers vs existing customers
The other landmark is “Long-Run Effects of Promotion Depth on New Versus Established Customers” by Eric Anderson and Duncan Simester (Marketing Science, 2004). Across three large field experiments with a direct-mail catalogue retailer, deeper discounts increased future purchases by first-time customers but reduced future purchases by established customers.
The researchers point to forward buying (stocking up while it’s cheap), customer learning and increased deal sensitivity. In plain terms: a generous first-order code can bring in customers who stick around, while repeatedly discounting to your regulars teaches them to wait for the next one. The study is more than 20 years old and pre-dates modern ecommerce, but the pattern it describes is exactly what many online stores report today.
What shoppers say about codes
Survey data is weaker evidence than an experiment (people don’t always do what they say), and much of it is commissioned by coupon companies. With that warning, the most transparent one we found is the RetailMeNot Incrementality Study, a survey of 1,018 American adults run by Kelton Global in March 2018. It found:
| Finding | Share of respondents |
|---|---|
| Search for a deal or offer when shopping online | 94% |
| Feel encouraged to make a first purchase with a new brand if they find an offer | 80% |
| Have made an unplanned purchase solely because they found a coupon or discount | 67% |
| Agree they can’t complete a purchase before searching for an offer | 62% |
Source: RetailMeNot / Kelton Global, US adults, n=1,018, fielded March 2018. US data, now several years old, and commissioned by a coupon business — useful as a direction, not a precise figure for Australia.
Abandoned carts
Baymard Institute’s cart abandonment statistics put the average documented online cart abandonment rate at 70.22%, averaged across 50 studies (2026 update). Baymard’s own 2026 survey of US shoppers found 42% had abandoned a cart because they were “just browsing / not ready to buy”. Setting those aside, the single biggest reason was extra costs too high (shipping, tax, fees) at 40%.
Note what’s not on Baymard’s list: “I didn’t have a discount code.” Codes aren’t a cure-all for abandonment. But because unexpected cost is the top fixable reason, a well-targeted reminder — free shipping, or a modest code in an abandoned-cart email — goes straight at the main objection. Whether it wins back enough orders to justify the discount is something you test, not assume (more on that below).
Why Shoppers Search for Codes (and Where You Lose Them)
A promo code box is an invitation. Shoppers who see an empty field at checkout reasonably assume someone else is paying less, so they open a new tab and search “[your store] promo code”. That detour is where the real risk sits.
The checkout detour
Baymard’s 2026 guidance on auditing checkout friction names a discount code field “drawing them away to search Google for coupons” as one of the hidden causes of drop-off that analytics alone won’t reveal. Once a shopper is on a search results page, a competitor’s ad or a better offer is one click away.
Collapse the field
Baymard’s checkout research (May 2025) recommends that the promo code field “should always be collapsed or hidden behind a link”, and that applicable promotions ideally be applied automatically. Shoppers who have a code will still find it; shoppers who don’t aren’t prompted to go looking.
Brand + “promo code” searches
These searches happen late in the journey, usually with a cart already built. If what they find is a current code you approved, they return and pay. If they find expired codes that fail, they get frustrated — and that frustration lands on your brand, not the coupon site.
Coupon browser extensions
Extensions now pop up at checkout offering to find codes. In December 2024, The Verge reported allegations that PayPal’s Honey extension swapped in its own affiliate tracking at checkout; PayPal said Honey “follows industry rules and practices, including last-click attribution”. Either way, it’s a reminder that a code applied at checkout doesn’t prove the code caused the sale.
A note on popular stats: you’ll see figures like “9 in 10 shoppers search for a coupon before buying” on many marketing blogs. Several trace back to coupon-company surveys whose methods aren’t published, so we haven’t repeated them here. The direction is consistent — lots of shoppers look for codes — but be wary of anyone quoting a precise number without a link to the original study.
When Promo Codes Work Best
The research points the same way: codes earn their keep when they change someone’s behaviour — a first order, a returning lapsed customer, a purchase brought forward into a sale event. They waste money when they go to people who were already at the checkout with their card out.
| Use case | Why it can work | Guardrails |
|---|---|---|
| First order / welcome code | Lowers the risk of trying an unknown store; Anderson & Simester found deeper discounts lifted future buying among first-time customers | New customers only; one use per customer; min. spend |
| Abandoned cart | Answers the top fixable objection — total cost — at the moment it matters | Send a reminder first and the code later; unique single-use codes; short expiry |
| Win-back | Sahni et al. found the effect was significantly higher among people who hadn’t bought in the previous year | Target customers inactive for a set period; don’t send to recent buyers |
| Seasonal events | Shoppers are actively looking for deals during Black Friday, Cyber Monday, Click Frenzy and EOFY | Fixed start and end dates; exclude already-discounted lines; plan stock |
| Influencer & partner codes | Each partner gets a named code, so you can see exactly which audience bought | One code per partner; usage limits; end dates; decide upfront if it can go public |
The Australian sales calendar
Deal-driven events are a big deal here. The Australian Retailers Association and Roy Morgan forecast a record $6.8 billion in spending over the 2025 Black Friday–Cyber Monday weekend (28 November – 1 December), up 4% on the year before, with low prices (42%) and great deals (38%) the top reasons shoppers gave for taking part. If you’re going to run a public code at all, these are the windows where shoppers expect one — and where running none can leave you looking expensive next to competitors.
Codes vs free shipping vs buy now, pay later
Not every conversion problem needs a percentage off. If extra costs are the objection, a free-shipping threshold may do the same job for less. If the basket is large, offering Afterpay or another BNPL option addresses affordability without lowering the price. Use codes where a discount is genuinely the lever, not by default.
The Risks, and How to Limit Them
Margin erosion
A discount comes straight off your margin, not your revenue. On a product with a 40% gross margin, a 20% code halves the profit on that sale — so you need roughly twice as many orders just to break even on gross profit.
Limit it: set a minimum spend, exclude low-margin and already-reduced lines, and prefer a fixed dollar amount over a percentage on big baskets.
Training customers to wait
This is the long-run effect Anderson & Simester measured among established customers: forward buying and increased deal sensitivity. If your regulars know a code is always coming, full-price weeks get quieter.
Limit it: keep big discounts for acquisition and a few predictable events; reward loyal customers with perks rather than constant percentage-off codes.
Coupon leakage
Codes meant for a small group — staff, a VIP list, a customer service apology, one creator’s followers — get shared on forums, social media and coupon sites, and end up used by everyone.
Limit it: use unique single-use codes for private offers, restrict eligibility to customer segments, and give the public an approved code so there’s less reason to hunt for private ones.
Code abuse
“New customer” codes reused with fresh email addresses, codes stacked with sale prices, or one-off codes with no usage cap that run for years.
Limit it: one use per customer, usage caps, end dates, and careful combination (stacking) settings. Our Shopify discount code guide covers each setting.
Public vs private codes at a glance
| Code type | Expect it to be shared? | Typical controls |
|---|---|---|
| Public promo code | Yes — plan for it | Modest value, min. spend, end date, exclusions |
| Welcome code | Probably | New customers only, one use per customer |
| Influencer code | Often | Named per partner, usage cap, end date |
| Abandoned-cart / service code | Shouldn’t be | Unique, single-use, short expiry |
How to Tell if a Code Is Paying Off
The question isn’t “how many orders used the code?” It’s “how many orders happened because of the code, and what did the discount cost on all the others?” That’s the difference between incremental sales and subsidised sales.
Give every channel its own code
Same offer, different names: one for email, one per influencer, one for each coupon site. Shopify’s Sales by discount report then shows usage and sales per code, so you can see which channel actually moved.
Send the code to Google Analytics
GA4’s recommended purchase event includes a coupon parameter, at both order and item level. Make sure your store or tag setup passes it, so you can compare code orders with non-code orders on revenue, margin and repeat purchase.
Run a holdout test
For emailed and abandoned-cart codes, randomly hold back a slice of the audience (say 10–20%) who get the same message without the code, or no message at all. Compare total spend per person across both groups — not just redemptions. That’s the method the Sahni study used, and it’s the only reliable way to see the true lift.
Check the weeks after, not just the promo window
Look for carry-over (people still buying after the code ends) and for dips (people who stocked up, or who now wait for discounts). Both effects showed up in the research above.
Judge on gross profit, not revenue
A code that lifts revenue by 10% but cuts margin per order by 25% can lose money. Work out the gross profit of both groups after the discount, shipping and payment fees.
Watch out for last-click credit
Affiliate networks, extensions and coupon sites (including us) are usually credited on a last-click basis. A shopper who found you on Instagram, built a cart, then searched for a code may be credited to whichever site supplied the code. That doesn’t make the channel worthless — a working code can rescue an order that was about to be abandoned — but it’s why channel-specific codes and holdout tests matter more than any one dashboard.
Promo Code Checklist
A clear goal: first order, win-back, cart recovery or event
Discount sized against gross margin, not revenue
Min. spend, exclusions, end date and usage limits set
Separate code name for each channel or partner
Private offers on unique, single-use codes
Promo code field collapsed at checkout
Holdout group for emailed and abandoned-cart codes
An approved public code for shoppers who go searching
Make Your Public Codes the Ones Shoppers Find
Whatever you decide about discounting, some shoppers will search for your codes. You can’t stop that, but you can influence what they find. A modest, approved public code with clear terms is far better than a leaked staff code or a page of expired ones that fail at checkout.
PromoCodes.com.au lists Australian store codes and deals, organised by store and checked by people. Listing is free: send your store name, website and the codes you’re happy to make public — with conditions and expiry dates — through our store listing form. Our guide on how to get your codes listed explains what to send and how codes are displayed, and you can ask us to take down any code that was never meant to be public.
Straight up: we’re new
PromoCodes.com.au launched recently, and we can’t promise a particular amount of traffic or sales. If you list with us, use a code name that’s unique to our site so your own store reports show exactly what it did — the same measurement advice we’d give for any channel.
Promo Codes and Sales — FAQs
Do promo codes increase sales?
They can. In 70 randomised experiments published in Management Science (2017), emailed discount offers lifted average spend by 37.2% during the promotion. But results depend heavily on who receives the code. Codes that reach new or lapsed customers tend to add sales; codes that reach people already about to buy mostly subsidise orders you’d have had anyway.
Do discount codes increase average order value?
Not automatically — a straight percentage off actually lowers the value of each order. Codes tied to a minimum spend (“$20 off orders over $150”) are the usual way to nudge baskets upwards. We didn’t find independent, published research giving a reliable average AOV lift, so test it on your own store with channel-specific codes.
Should I hide the promo code box at checkout?
Baymard Institute recommends collapsing it behind a link (for example “Have a promo code?”) and automatically applying promotions where possible. That way shoppers with a code can still use it, but the empty field doesn’t send everyone else off to search engines mid-checkout.
Will offering codes hurt my brand?
Occasional, well-framed offers rarely do. The bigger risk is behavioural: constant discounting can teach established customers to wait, which is what Anderson and Simester’s field studies found. Keep large discounts for acquisition and a handful of predictable events like Black Friday or EOFY.
How do I stop private codes ending up on coupon sites?
You can’t fully stop a reusable code being shared. Use unique single-use codes for private offers, add usage limits and end dates, restrict eligibility to customer segments, and publish an approved public code so shoppers have less reason to hunt. If one of your private codes appears on PromoCodes.com.au, email us and we’ll remove it.
Is there Australian research on promo code use?
Much less than for the US. Most published code-usage surveys are American. The Australian data we could verify is about deal-seeking more broadly — for example the ARA and Roy Morgan’s forecast of $6.8 billion in Black Friday–Cyber Monday spending in 2025, with low prices and great deals the top motivations. Your own store data is the best Australian evidence you’ll get.
Put Your Approved Codes in Front of Shoppers
List the codes you’re happy to make public, with the terms you set. It’s free, and a real person checks every listing.
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