The Gift With Purchase Playbook And how to work out if it beats your discount

A percent off comes straight out of your margin at full retail value. Every dollar the customer saves is a dollar you lose.

With a gift, you pay COST and they see RETAIL. So the same offer can be cheaper for you and still look more generous to them.

Shoppers like it too. In the Beyond the Discount report (DTC Newsletter and Smile.io), 48.2% of shoppers picked a gift with purchase as an incentive that sways them. On the brand side (brands doing over $1M a year), 40.7% are running one this holiday season, and when they were asked which tactic can outperform a straight discount, gift with purchase was the top answer at 24.1%.

Two caveats, so you've got the full picture. Free or fast shipping still ranked higher with shoppers, at 53.3%. And 11.3% of those brands said nothing beats a discount for them. So a gift MIGHT beat your percent off, and your own numbers get the final say.

These are example numbers, so swap in your own. An $80 order, where the products cost you $24 and you pay $8 in shipping.

That's $10 more kept on every order with the gift. Put another way, the gift offer could win about a quarter fewer orders than the 20% off and you'd still make the same money.

If you'd like to do the sums by hand, here they are:

Profit per order = what the customer pays, minus product cost, minus shipping you pay, minus the gift's cost to you

Orders needed to match a normal week = normal profit per order ÷ profit per order with the offer

On the example, 20% off needs 48 ÷ 32 = 1.5x your normal orders. The gift needs 48 ÷ 42 = about 1.14x.

One rule when you run it: in your own sums the gift is worth what it COSTS you. The $20 retail value is for the customer.

Or skip the sums and let the calculator do it! Pop in your order value, your costs, and what the gift costs you (plus what it sells for), and it shows what you'd keep per order at full price, at 10 to 30% off, with free shipping, with a gift, and with a gift plus free shipping. It also tells you how many extra orders each offer needs to match your baseline. It's profit per order, before ad spend and fees.

Set the gift at a spend just above your average order value. If your average order is $68, put the gift at $80 (example numbers). Now the offer is doing two jobs: it gives people a reason to buy, and it nudges the cart up by $12 on the way.

If the threshold sits BELOW your average order, you're giving a gift to people who were already spending that much.

Give each line 0, 1 or 2.

8 or more, run it. Between 5 and 7, fix the weakest line first. Under 5, pick a different gift.

1. Skincare: a mini of your bestseller, or of the next step in the routine.
2. Haircare: a travel-size mask or a sachet set of a product they haven't tried.
3. Makeup: a mini of your hero shade, or a pouch if your margins are tight.
4. Supplements and wellness: travel packs, a scoop or a shaker.
5. Food and drink: a sample of a new flavor, or a recipe card with a mini jar.
6. Candles and home fragrance: a tealight or votive in a scent they didn't order.
7. Apparel: socks, a scrunchie or a tote. Small, light and one-size.
8. Jewelry and accessories: a polishing cloth and travel pouch.
9. Pet: a sample bag of treats or a small toy.
10. Baby and kids: a sticker sheet, a mini version of a product, or a wash bag.

Slow-moving stock can make a great gift too, as long as it still scores well on "wanted on its own".

No product of your own that works as a gift? You can always order something relatively cheap, like a tote bag or an accessory, and use that. You can also partner with another brand and do a cross-collaboration, where their product goes in as your gift (and it's a cross-promotion for both of you). Either way, run it through the scorecard first so it's something your customer would actually want.

Make the gift its own product first, so its stock is tracked. Then, from your Shopify admin:

1. Go to Discounts > Create discount > Buy X get Y.
2. Under Method, choose Automatic discount (no code for the customer to type) or Discount code.
3. Under Customer buys, choose Minimum purchase amount, enter your threshold, and pick the products or collections that count towards it.
4. Under Customer gets, set the quantity to 1, select your gift product, and choose Free.
5. Set a maximum number of uses per order to 1, so one order gets one gift.
6. Check Eligibility, Maximum discount uses and Combinations. Decide on purpose whether it can combine with your other discounts.
7. Under Active dates, give it a start date AND an end date.
8. Click Save.

Three things to know. The minimum purchase amount doesn't count shipping or taxes. You can have 25 automatic discounts active at once, and that total includes any made by apps. And if you sell in person, Buy X get Y only works at online checkout on POS Lite.

This is the bit that's easy to miss. Shopify's Help Center spells it out: "The free or discounted 'get' item is never automatically added to the cart."

So your customer has to add the gift themselves. If they don't know that, they hit your threshold, check out, and the gift never ships. Then you get the email. 🙊

A few ways to sort it:

• Tell them, everywhere. The announcement bar, the product page and the cart should all say "add your free gift to your cart".
• Link the announcement bar straight to the gift's product page, so adding it is one tap.
• Show the gift in the cart. If your theme lets you feature a product in the cart or cart drawer, put the gift there with an add button.
• Or use an app that adds it for you. There are plenty of great ones in the Shopify App Store. Test which one works best for your store and your theme.
• Then place a test order. Hit the threshold without adding the gift and see what your customer would see. Do it again with the gift in the cart and check it drops to $0.

• Three Ships Beauty runs it as a spend threshold across the top of the site: "FREE MINI TOTE WITH ORDERS +$85".
• RYZE lists every gift on its mushroom coffee page with a dollar value next to it: Mush Magnet $5, Spoon & Scoop $10, US shipping $4, plus two more gifts to pick. It runs this alongside a percent off, so it's a stack.
• Huel gives new subscription customers a free t-shirt it values at $25.

Every one of them puts a VALUE on the gift, or names it clearly, right where you're deciding. And Laura Thompson of Three Ships says in the Beyond the Discount report that she's a bigger fan of free shipping or gift with purchase promos for long weekends.

• Is the gift in the orders? Most orders over the threshold should have it in them. If they don't, or the "where's my free gift?" emails start, your add-to-cart messaging needs work.
• Profit per order against the last discount you ran.
• Average order value against your last comparable period. ✨