A discount code is a word or string of characters a customer types in at the checkout to reduce the price, get free delivery or receive a free gift. In the UK most shoppers call them voucher codes, and you will also see promo codes and coupon codes.
How discount codes work
The shop sets up a code in its ecommerce platform with a value and conditions. The value might be a percentage off, a fixed amount, free delivery or a gift with purchase. The conditions might include a minimum spend, an expiry date, first orders only, certain products only, or a limit of one use per customer. Codes can be generic, such as SUMMER15, or unique, generated one per customer.
Codes reach shoppers in several ways: as a welcome offer for joining the email list, in a basket reminder, through influencers who each get their own code, on printed inserts, and through UK voucher and cashback websites. Those sites often work through affiliate networks, which pay them a commission when a sale is credited to them.
Because each code can be traced, they also act as a measurement tool. A podcast sponsorship or influencer post is hard to track by clicks, but a unique code shows how many orders came from it.
Why it matters
A visible code box changes behaviour. A shopper who sees an empty “Voucher code” field at the checkout may leave to search for “[your brand] voucher code”. If they land on a voucher site, find a code and come back, you have given away margin on an order that was already yours, and if the site is in your affiliate programme you may also pay it commission under its attribution rules. Some never come back at all.
Codes also need care under the advertising rules. The CAP Code requires significant conditions, such as a minimum spend, exclusions or a closing date, to be clear in the promotion itself. A code tied to a reference price also has to respect the rules on was-now pricing, and influencer codes do not remove the need to label a paid post as an ad.
Common mistakes
- A large, empty code box at the payment step that sends shoppers off to search.
- Generic codes meant for one group, such as staff or subscribers, that leak to voucher sites within days.
- Codes with no expiry date, which keep circulating long after the campaign.
- Sending a code with every abandoned basket reminder, which trains regulars to wait.
- Error messages that just say “invalid code” without saying why, such as a minimum spend not being met.
How to act on it
Make the code field less prominent: a small “Have a voucher code?” link that opens the box works for those who have one without prompting everyone else to hunt. Where a promotion is running, apply it automatically or show the code on the site so nobody needs to leave. This is one of the smaller changes in checkout optimisation that is worth testing.
Use unique, single-use codes for email and partners, set expiry dates on everything, and agree with affiliate partners which sites may publish your codes. Then judge every promotion on contribution margin after the discount, not on revenue. In performance marketing work I report affiliate and voucher sales separately from other channels, so it is clear how many of those orders were new and how many were already on their way.