This question comes up constantly among Shopify merchants, usually right after margins dip or repeat purchases slow down.
The honest answer is: it depends.
But when discounts reduce revenue, it’s rarely because “discounting is bad.”
It’s almost always because the discounts had no strategy behind them.
Why the discount debate is so polarized
Most ecommerce advice treats discounting as a moral issue.
One camp says you should never discount because it devalues your brand.
The other says every store needs a 10% popup to survive.
Both sides miss the same thing.
Discounts are not inherently good or bad. They’re a tool.
Like any tool, they only work when you know what you’re trying to move.
The myth that discounts “train customers”
If discounts truly trained customers to never buy at full price, ecommerce as an industry wouldn’t work.
Yet:
- Plenty of brands discount frequently and grow
- Plenty of brands never discount and stagnate
- Plenty of customers buy full price even when discounts exist
What discounts actually do is reveal customer behavior:
- Some customers are price sensitive
- Some are time sensitive
- Some are neither
Discounts don’t create bad customers. They expose who your customers already are.
The question merchants should ask instead
The real question isn’t “Should I discount?”
It’s: “What metric is this discount supposed to improve?”
Every profitable discount is tied to a single outcome:
- Conversion rate
- Average order value
- Lifetime value
- Customer acquisition cost
If you can’t name the metric, the discount is almost guaranteed to hurt revenue over time.
When discounts really do reduce revenue
Discounts tend to backfire when they follow the same pattern:
- Blanket sitewide sales
- Always-on promotions
- No segmentation or eligibility
- No end condition
- Used reactively when sales slow
This trains customers to anchor on the discounted price, not because they’re greedy, but because you taught them to.
Over time:
- Full-price weeks feel expensive
- Repeat purchases cluster around sales
- Margins quietly erode
That’s when merchants conclude discounts “don’t work.”
When discounts increase Shopify revenue
Discounts work when they change how customers buy, not just how much they pay.
A useful way to think about discounts comes from Matthew Roche, who points out that discounts can be profitable when they’re tied to low-cost acquisition channels: Read his LinkedIn post here.
For example, a refer-a-friend discount often costs less than paying for the same customer through Google Ads, even though both appear as “discounts” on the surface.
High-performing merchants use discounts to:
- Reduce first-purchase friction (see: first order discounts)
- Increase cart size
- Encourage repeat behavior
- Lower CAC in owned or referral channels
- Move inventory without harming brand perception
Common examples:
- Buy more, save more tiers (learn how these combine with other discounts)
- Bundles instead of price cuts
- Free gift with purchase
- Referral incentives
- Repeat-purchase rewards for tagged customers
These don’t feel like desperation discounts.
They feel intentional.
“Apple doesn’t discount” is the wrong comparison
Apple doesn’t discount because Apple already has pricing power.
Most Shopify merchants:
- Compete with many alternatives
- Pay to acquire customers
- Don’t control category expectations
Discounting isn’t a sign of weakness. Copying strategies from companies with monopoly-like demand is.
Loyalty programs are structured discounts for repeat purchases
Loyalty programs aren’t an alternative to discounts. They’re a structured way to use them.
Instead of offering a price cut up front, loyalty programs attach discounts to a specific behavior: coming back and buying again.
This works well because:
- The incentive is earned, not given away
- The discount is tied to repeat purchases
- Redemption happens later, not at the first checkout
- Not every customer redeems, protecting margins
Examples include:
- A discount on the 10th order
- Points earned per purchase that unlock future savings
- Exclusive offers for repeat customers
In all of these cases, the discount is doing exactly what it should do: increasing lifetime value instead of just pulling demand forward.
The math didn’t change. The intent did.
The rule that keeps discounts profitable
There’s one rule that separates healthy discounting from destructive discounting.
Every discount must have a constraint.
That constraint might be:
- Eligibility (e.g., logged-in customers only)
- Time
- Quantity
- Cart value
- Customer type (e.g., tagged VIPs or friends and family)
- Channel
- Frequency (e.g., one-time use codes)
Constraints protect margins while still driving action.
A simple framework before launching any discount
Before launching a discount, ask:
- Who is eligible?
- What behavior am I incentivizing?
- What metric should improve?
- When does this stop?
- What happens if it works too well?
If you can’t answer all five, pause.
Final takeaway
Discounts don’t reduce Shopify revenue. Uncontrolled discounts do.
When discounts are targeted, constrained, and tied to a metric, they become one of the most powerful growth levers in ecommerce.
If you want to run sophisticated discounts without sacrificing margins, you need tools that let you express logic, not just percentages, like Regios Discounts.
Related Guides
Ready to implement strategic discounts? Start here:
- Why Automatic Discounts Are Better Than Codes — Reduce friction and prevent code leaks
- Shopify Discount Stacking Guide — Understand how discounts combine
- How to Exclude Products from Discounts — Protect margins on specific items
- First Order Discounts — Reduce first-purchase friction
