BOGO vs gift with purchase vs discount: which offer makes you more money?

These 3 offers sound alike, but they hit your profit in very different ways.

The big difference: a discount and BOGO free give money back on every order. A gift costs you only the gift, and a spend threshold can push shoppers to buy more first.

There's also a reason shoppers often like "more for free" better than "less to pay." In a field test reported in the Journal of Marketing by Chen, Marmorstein, Tsiros and Rao, a hand lotion sold about 1.8 times as many units per week with a "50% more free" bonus pack (3.38 units) than with 35% off (1.88 units), even though 35% off was the slightly better deal.

An offer can bring in more orders and still leave you with less money. So let's run the numbers on a simple store and compare offers on profit per visitor: the profit you keep, divided by everyone who visited.

The store sells a $40 product that costs $12 to make. Shipping and packing cost $8 an order (plus $1 for a second item). With no offer, 2.5% of visitors buy. Every offer gets the same 20% lift in orders, so only the cost changes.

Three things jump out:

One catch with the 2-item offers: some shoppers would have bought 2 at full price anyway. For them, the deal is pure cost. A test tells you how many second items are true extra sales. This is also why average order value and conversion rate belong together: multiply them and you get revenue per visitor.

Run this before any promotion. Take your profit per order with no offer, divide it by your profit per order with the offer, and subtract 1. That's the extra orders you need just to stay even.

In our example, 20% off drops profit per order from $20 to $12. $20 ÷ $12 = 1.67, so you need 67% more orders just to make the same money. That's a big jump to ask of any offer.

A discount is the easiest offer to launch and the most expensive one to keep. Before you run one, work out how many extra orders it needs just to break even. Most owners never do that math.

Of the 25 top stores we broke down page by page, 2 show a free gift already applied in the cart: Venus et Fleur and Blueland. That's a small number, so a well-placed gift can still stand out.

Venus et Fleur doesn't cut the price of a $699 vase. It adds something that feels valuable and shows it in the cart. Its homepage also promotes a gift for bigger purchases, so shoppers see the offer early.

Both gifts are things that go with the product: a room spray with flowers, a pump with a soap kit. A related gift feels like part of the deal. And gifts sit next to other ways to raise order value: 22 of the 25 stores suggest an upsell or cross-sell before checkout. (Here's the difference between upsells and cross-sells.)

Show the offer on the product page and in the cart, not only at checkout. For more ways to lift order size, see our guide on how to increase average order value.

Shopify's built-in "Buy X get Y" discount handles both. According to Shopify's help center, you can trigger it with a minimum quantity or a minimum purchase amount, and the "get" item can be free, a percentage off or an amount off. Here's the setup:

Want a line about the gift next to the pay button? Shopify's one-page checkout is the default, and custom text inside the checkout steps needs Shopify Plus. On other plans, use the product page and cart.

Black Friday is when shoppers expect a deal, so it's tempting to slash prices. But when every store is shouting "30% off," one more percentage is easy to scroll past, and it comes straight out of your margin. Here's a smarter plan:

For everything else to fix before the rush, use our Black Friday CRO checklist.

The table above is a model. Your shoppers decide the real result. With enough traffic, A/B test the offer: half your visitors see it, half don't, at the same time. Then judge it by profit per visitor, after the cost of the discount or gift, not by orders.

At FunnelSpark, an ecommerce CRO agency for Shopify stores, we call a test a win only when it beats the current page at 95% confidence on orders or revenue per visitor. For offers, we also count the cost of the gift or discount. More in our guide to ecommerce A/B testing.