Choose the offer whose full cost fits your contribution and customer goal: a gift’s cost is what it costs you to supply, ship, and fulfill—not its shelf price.
A gift can make an offer feel tangible, while a discount lowers the amount a customer pays. Compare them with the cost to your business and the orders each offer may add. The gift’s advertised retail value is not the same as your cost to provide it.
Use the same eligible products, order assumptions, and time period for both options. Include only costs that apply, but do not omit extra packing or postage just because they are small.
| Cost or result | Free gift example | Discount example |
|---|---|---|
| Eligible orders expected | 60 | 60 |
| Assumed average order before offer | $70 | $70 |
| Offer cost per eligible order | $4 landed gift + $1 handling + $2 additional postage = $7 | 10% of $70 = $7 |
| Total offer cost | 60 × $7 = $420 | 60 × $7 = $420 |
| Contribution before offer cost per order | $28 | $28 |
These are hypothetical numbers for illustrating the calculation. “Landed gift” means the gift’s cost to get it ready for your store, including the relevant supplier and inbound costs. Replace the assumptions with your own inventory, pick-and-pack, shipping, payment, and return costs.
Assume, for this example only, that 45 orders would happen without the offer and the promotion results in 60 total eligible orders. That is 15 additional orders. At $28 contribution per order before the offer, those 15 orders add $420. Subtract the $420 offer cost and the promotion reaches the same $1,260 contribution as the 45-order baseline:
This is a simplified break-even example, not a forecast. It assumes the offer causes 15 additional orders, all 60 orders receive the offer, the average order remains $70, and the $28 contribution estimate already includes other variable order costs. If those assumptions change, so does the result. In practice, compare against a credible baseline and account for orders that would have happened anyway.
| If your priority is… | Consider… | Check before launch |
|---|---|---|
| Making the offer feel like an added product experience | A gift customers will actually use | Gift inventory, landed cost, extra packing, postage, and whether the gift suits the audience. |
| Giving customers flexibility and a lower checkout price | A discount | The amount of contribution given up on every eligible order, including orders that would happen anyway. |
| Raising the cart enough to cover added cost | A threshold-based offer | Whether the threshold is understandable and whether the resulting basket still leaves contribution after fulfillment. |
For current mechanics and eligibility, read Shopify’s Buy X get Y discount setup guide before configuring a gift offer. For broader product-page clarity, see the product-description guide; when you have chosen the offer, the Instagram post guide for Shopify brands can help plan how to communicate it.
Write down your baseline, full offer cost, and the number of additional orders needed to cover that cost. Then select the gift or discount that fits your customer and margin, and review contribution, returns, fulfillment effort, and stock after the promotion.