Free Shipping vs Discount Codes: What Motivates Customers More?

Shopify merchants often face a simple question with a big impact: should you offer free shipping or discount codes? The right choice can increase average order value (AOV) and conversion rates while protecting profit. To pick the best strategy for your business, you should understand what motivates your customers.

Both free shipping and discount codes work. Their effectiveness depends on your product mix, price points, margins, and what shoppers expect in your niche. 

Below, you’ll see when free shipping wins, when discounts make more sense, and how to combine both for steady growth.

How Discounts and Free Shipping Affect Customer Behavior?

Promotions and free shipping offers trigger different responses in the human brain. Free shipping removes a late-stage cost that can cause cart abandonment while percentage or dollar-off discounts deliver instant savings that feel like a win.

How Free Shipping offers work?

Many shoppers will add one more item to reach a free shipping threshold. That small behavior shift increases AOV while giving customers the feeling they “earned” a reward.

Free shipping works best when shipping costs are a meaningful part of the order, or when your category has strong “free shipping” norms. It also shines for repeat buyers who already trust your brand.

To set this up in Shopify, go to Settings → Shipping and delivery and create a rate that activates at your target order value.

How do discounts work?

Discount codes work well for new customer acquisition, inventory turns, and time-bound events. They are flexible, easy to track, and simple to personalize.

Create targeted codes in Discounts → Create discount in your Shopify admin. Match each code to a clear goal: first purchase, category push, slow-moving SKUs, or seasonal sale.

Do people buy more from you if you have discounts? Yes, but only when paired with:

• Clear bundle pricing in product descriptions

• Upsell widgets showing savings per added item

• Post-purchase discounts for future orders

Discounts or Free shipping: Which one to offer?

The zero-price effect is the tendency for people to overvalue anything labeled “free.” When the shipping fee drops to zero, the offer can feel better than a larger, equivalent discount.

That’s why “Free Shipping” can beat a bigger dollar-off coupon. A shopper may pick free shipping worth $5.95 over a $10 discount because “free” feels simpler and more rewarding.

However, you don’t have to choose one. Bundles plus free shipping are a powerful duo.

Pair a modest sitewide discount with a free shipping threshold, or use discounts for first-time buyers and free shipping for loyal customers.

Use Discounts to Clear Inventory and Attract New Shoppers

Discount codes work best for time-sensitive promotions or excess stock. They create urgency and lower the barrier for first-time buyers. In Shopify, you can set these up via Discounts > Create discount in your admin.

Do coupon codes motivate consumers to spend? Yes – but primarily for price-sensitive shoppers. Use them strategically:

• Offer 10-15% off first orders via popups

• Create BOGO deals for slow-moving products

• Set automatic discounts for cart value thresholds

Use percentage-off for higher-priced items, and fixed-amount ($10 off) for lower-priced items. For AOV growth, tiered discounts work best.

Example: “$10 off $50, $25 off $100, $50 off $150.” Tiering creates clear steps that invite larger baskets—similar to how tiered discounts often outperform fixed discounts.

Offer Free Shipping to Increase Average Order Value

Free shipping motivates 93% of online shoppers to buy more items. Set minimum order thresholds in Shopify under Settings > Shipping and delivery. This encourages customers to add products to reach the free shipping tier.

When should you discount shipping for a customer? Use it when:

• Your average order value is below profit margins

• Competitors offer free shipping on similar products

• Testing holiday promotions or flash sales

A good free shipping threshold is typically 15–30% above your current AOV. This nudge encourages one more item without scaring buyers off.

Example: if your AOV is $65, test a threshold of $75–$85. Promote it with a site-wide banner and a cart progress bar so shoppers always know how close they are.

Boost Results With MBC Bundle Builder

No matter which strategy you use, free shipping, discounts, or both the right tooling makes execution easy and measurable. MBC Bundle Builder helps you create offers that lift AOV and feel good to shoppers.

With MBC Bundle Builder, you can:

• Create custom product bundles that help customers reach free shipping thresholds

• Set tiered and volume discounts that grow with cart size

• Build Mix & Match offers that increase cart value while giving choice

• Track performance with built-in analytics to refine each campaign

• Promote “bundle and save” offers in high-visibility spots to boost conversions

Ready to fine-tune your promo mix? Try MBC Bundle Builder and ship a strategy that raises AOV, protects margin, and keeps customers coming back.

👉 Further reading: 10 Ways Shopify Bundle Apps Increase Average Order Value

This article was created with assistance from vevy.ai and proofread, fact-checked, and validated by its author.