Hello @angelina-new-user, free shipping almost always wins on conversions and AOV in our experience. People will add another item just to hit a shipping threshold, but a percentage-off code trains them to expect a discount every time and eats into margin more directly. If you can absorb the cost, try a free-shipping threshold (like free over $50) instead of sitewide, it lifts AOV without giving away margin on every order. Discount codes work better for clearing specific inventory or winning back lapsed customers, not general conversion.
I’d probably test both, because it really depends on the product and your average order value. Free shipping tends to feel like a stronger offer psychologically since it removes a cost people already expect at checkout, while a percentage discount can be better when the order value is higher.
One thing I’ve noticed is that free shipping can also encourage people to add another item if you set a reasonable minimum threshold. Something like free shipping over $75 can work better for AOV than simply offering free shipping on everything.
I’d also look at the margins before deciding. A 15% discount can cost you quite a bit more than free shipping on a small order, especially if your products have decent margins but shipping is relatively predictable. I keep an eye on the overall store performance with SiteGuru, but for promotions I’d mainly compare conversion rate, AOV and profit per order rather than just looking at which offer gets more checkouts.
If you have enough traffic, I’d honestly run an A/B test. The offer that produces the highest conversion rate isn’t necessarily the one that makes you the most money.
Based on results in the majority of stores, the following is a brief summary:
Because free shipping removes the primary cause of cart abandonment—unexpected additional fees—you get more completed checkouts (better conversion rate).
Because the cash savings increase when customers add more goods to their cart, percentage discounts result in a larger Average Order Value (AOV).
Using a free shipping threshold (such as “Free Shipping on orders over $50”) is the best course of action. This gives you the best of both worlds by eliminating checkout abandonment and making customers pay extra to access the benefit.
There isn’t a universal winner because free shipping and a discount change different parts of the economics. I’d test them with the same traffic and a holdout, then compare purchase rate, AOV, contribution per session, refund/cancel rate and the share of carts just below the threshold. If shipping is the surprise revealed late in checkout, free shipping may remove more friction; if shipping is predictable and product margins are strong, a targeted discount may be better. Set the threshold just above normal order value and check the actual shipping subsidy by product and market. The decision should be contribution profit per visitor, not checkout volume alone.
I wanna share with everyone here a successful case study from one of our customers at BOGOS: Free Gift & Bundle Upsell app.
The brand is Klower Pandor, a real light-luxury fragrance brand out of Taiwan, which wrestled with this exact question and landed somewhere interesting.
They’d been leaning on year-round percentage discounts and found the usual trap: margins kept shrinking, and the constant markdowns started chipping away at how premium the brand felt. So they flipped the approach.
The result:13x SALES INCREASE in a single month (counting only orders with sales promotions) - driven by higher AOV, a wave of first-time buyers, and lower cart abandonment.
Here’s what they actually did:
Free shipping for any orders reaching a spending threshold - not on every order. That gave people a concrete reason to add one more item rather than just eating the shipping cost on tiny carts.
Tiered gifts above that - spend a bit more, get a free fragrance product (hand cream, sleep spray, candle). Each tier nudged the cart higher, and the gifts doubled as product samples that pulled people back for repurchases.
Limited-edition merch to pull in new buyers - they tapped a K-pop collaboration and offered exclusive branded gift. That’s what drove a lot of the first-time buyers.
However, making shoppers claim gifts manually kills conversions. Klower Pandor auto-added the collectible to the cart the moment a qualifying item was selected - no clunky claim step, no friction.
And surprisingly, that was just one small piece of their whole new-customer strategy. You can read more in the full interview if you’re interested.
My advice? If you’re tight on budget, free shipping over a spending threshold is a solid starting point, but pair it with other incentives (a gift, a tiered reward) to actually push AOV and keep people moving to checkout.
For me, free shipping with a minimum order value makes more sense than a straight discount. It gives customers a reason to add something else to the cart, while you’re not cutting into the product margin as much. I think the important part is finding a threshold that feels achievable for customers but still makes sense for the store. It’s definitely worth testing both and looking at profit per order, not just the conversion rate.
For one, free shipping on all orders can disincentivize larger carts. I also like a nominal discount because it helps with attribution.
That being said, we split test a 10% versus a 15% discount for first-time visitors and found that the engagement rates were basically the same. So I don’t think you need to discount deeply either.
Hello @angelina-new-user, good to see both sides argued with real numbers here - the threshold-based free shipping case above and @DanielAnderson’s split-test showing discount depth barely moves engagement. They’re not really contradictory: free shipping mainly protects margin per order while a discount is easier to measure per campaign, so the practical move is to run them the same way DanielAnderson tested his discount tiers, an automatic “free shipping over $X” discount alongside a percentage code for a couple of weeks each, both native to Shopify, and compare profit per order rather than conversion rate alone.
Hi there @Icey.Lane
Free shipping is likely to be more effective when shipping costs are a big checkout pain point, and percentage discounts can be more powerful for more expensive products. I would run them both using Shopify’s discount functionality and measure conversion rate, average order value, and total margin rather than just looking at sales. A free shipping threshold can also encourage customers to throw in one more item to qualify, which can boost order value without letting shipping costs run wild.
Hey! I don’t think there’s one clear winner here. It all depends on your margins and shipping costs.
Free shipping is usually easier to control because the cost stays fixed, while a percentage discount gets more expensive as the order value increases. For example, 15% off a $150 order costs you $22.50, while shipping might only cost you $6–8.
One approach worth testing could be free shipping above a certain order value, ideally just above your current AOV. Along with that you can keep seasonal percentage discounts or flash sales.
That way, free shipping helps encourage bigger carts, while discounts create more urgency when you actually run a promotion.
Hi Angelina,
I came across your post about comparing free shipping vs discount codes and which option is actually more profitable.
I’m building a Shopify app called MargeFlow for exactly this kind of decision. It lets you enter your real costs — product cost, shipping, packaging, payment fees, CPA, target margin — and test a discount before launching it.
The goal is simple: know how far you can discount without dropping below your target margin.
MargeFlow is currently going through Shopify’s app review. If you’re still looking for a better way to compare promo decisions, I’d be happy to let you try it once it’s approved.
