What Are Promo Codes?

eCommerce is a huge industry -- and the pandemic has only helped push shoppers to the web.

In 2020, U.S. consumers spent a collective $861.12 billion online, a 44% increase over the previous year. And though you probably contribute to a tiny portion of that spending, you might be wondering how to save a few bucks on your online orders. Enter: promotional codes.

These days, you don’t have to pay full price for items online. With the help of special savings codes — and tools that can help you find them — it’s easier than ever to score a discount.

Here’s everything you need to know about promotional codes and how to take advantage of them.

What are promotional codes?

In the past, if you wanted to apply a special discount or sale price to an item you were buying, you’d have to clip a coupon and hand it over to the cashier when checking out. And you can often still do that when shopping in person.

However, that process doesn’t really work online. That’s why businesses create promotional codes — most commonly referred to as “promo codes” or “discount codes.”

These are strings of letters and/or numbers that you can enter when closing out your online shopping cart, which automatically apply discounts approved by the vendor.

The code may be a random string of alphanumeric characters, such as “CV5J-TH88-AN62.” Or it could be a phrase that references a specific promotion. Think: “WELCOME21” or “HAPPYBDAY.”

Online retailers will often offer these codes for site-wide sales, such as 15% off the entire store or free shipping on orders over $50.

In other cases, they may offer special codes to individuals who complete certain qualifying steps, such as signing up for emails or using a branded credit card to pay for an order. These codes also often expire after a set period of time.

Due to the amount of savings that can be achieved through the use of coupon codes, many people across the United States use them when shopping online. According to Statista, 88% of U.S. online shoppers used coupons in 2020.

 image showing the percentage of US consumers who use coupon codes

Why do businesses offer promo codes?

You might be wondering why a business would essentially give money away in the form of promotional codes. It’s really for the same reasons stores offer physical coupons or have sales.

Offering these special deals helps attract new customers plus keeps existing shoppers loyal to the brand. Promotional codes also encourage more spending per transaction.

Think about it: You’re probably willing to spend more money overall if you’re getting a good deal or free shipping. Plus, providing discount codes for older merchandise can help clear it out faster and make room for new inventory.

They’re a win-win for everyone involved (as long as you’re not going over your shopping budget, of course).

How do businesses use coupons to incentivize customers?

Businesses use coupon codes in several different ways. Here are some of them.

1. Attract first-time customers

To attract first-time buyers, businesses need to spend money on marketing.

Since first-time shoppers aren’t necessarily familiar with certain brands or businesses in the beginning, coupons are a great way to overcome barriers and make customers take the plunge. It gives them a reason to purchase a product from one business as opposed to purchasing from its competitors.

Since customer acquisition can be extremely expensive, coupons offer a great way for businesses to lower their marketing costs while keeping their customers happy at the same time.

2. Get shoppers back who abandon their carts

The percentage of online shoppers who abandon their carts is staggeringly high. On mobile alone, 80.6% of shoppers abandoned their carts in quarter two of 2021.

graph showing the percentage of online cart abandonment by device type from 2020 to 2021

Reasons for shopping cart abandonment include lack of trust, conducting research to buy later, website errors, and more. But, one of the biggest reasons for cart abandonment is high prices at checkout.

Therefore, many businesses solve this objection by offering coupons as a way to decrease the price — which gives customers an incentive to go back and finish the purchase.

3. Build brand loyalty

Often, in an attempt to gain new customers, businesses get so overwhelmed that they forget to reward their existing buyers.

Coupons are a great way to generate loyalty as it gives frequent buyers free or better offers every once in a while — making them feel like VIPs.

These types of rewards will come back to businesses in the form of positive referrals and excellent word-of-mouth recommendations, as well as continued relationships with customers who helped the business grow to what it is today.

4. Track marketing referrals and ROI

Coupons can help businesses track their referrals for events by looking at which partners were responsible for bringing in the most leads or customers.

By generating unique promo codes and distributing them at events, businesses are able to see which partners are worth the investment. This will aid the business in its future campaigns since it’ll be able to invest smarter — resulting in a higher ROI.

Therefore, if analytics from events is a weak spot for a business, coupons are an excellent way to not only see which partners are its biggest assets but also to drive massive sales at the same time.

How to find promotional codes for your purchases

At this point, there are millions of promo codes floating around the web, many of which have expired. Unless a website is actively advertising a site-wide promotion, you may not be aware that certain discounts exist. So how can you find promo and discount codes quickly and easily?

1. Use a coupon aggregator

One of the easiest ways to find and apply promo codes to your online purchases is by using a coupon aggregator. This is a website or tool that collects promo codes from around the web and makes it easy to find them all in one place.

CouponFollow, for instance, created a robust system to track online discount codes and surface them to consumers.

All you have to do is search CouponFollow for the retailer you’re buying from to see a list of available deals. Below is an example of what comes up when you search for Target.

coupons at target

CouponFollow will note how long it’s been since each code was last used, as well as whether a deal is “verified,” meaning TK. You can toggle the setting near the top of the page to show verified codes only.

2. Install a browser plugin (like Cently)

If you really want to streamline your shopping process, you can add a browser extension that automatically searches for and applies relevant discount codes each time you check out.

The Cently browser extension is a great option, for example. On average, it finds a discount worth 40% to 50% off (or about $20 bucks).

Here’s how it works: Start by downloading the extension and adding it to your browser. Now when you shop online and get ready to check out, Cently will pop up in the upper-righthand corner to let you know if potential savings are available.

an online savings tool

When you click on “Save Money,” Cently will then start scanning its database to find you promo codes for that retailer.

testing codes

Finally, Cently will apply the best deal to your cart. If there aren’t any valid codes available, it will let you know you already have the best price.

cently determining best price

3. Sign up for emails

If there are certain stores you love shopping from, consider signing up for their promotional emails. Often, stores will include limited-time promo codes in these emails so subscribers can be the first to know about special deals.

4. Check social media

Another way to stay on top of the latest promo codes for your favorite stores is to follow their business accounts on social media.

Retailers regularly post ads on platforms like Facebook, Instagram, and TikTok, sharing discounts and promo codes you can use for added savings.

Pro tip: Social media influencers often get their own personal promo codes to share with followers -- find out which personalities rep your favorite brands and give them a follow, too.

5. Test out these tried-and-true promo codes

If you aren’t having any luck finding codes, you can try out a few that tend to work across various retailers.

For example, it’s common for retailers to offer promo codes to new members or email subscribers. And often, that code is the phrase “WELCOME” -- sometimes followed by a number like 10 or 15. It doesn’t hurt to try it out and see what happens.

Another common promo code: “TEST.” Likely, developers sometimes forget to make their test codes inactive once the site is ready. That means you get to save some cash (before they realize the mistake, anyway).

Give these seven common promo codes a shot to score additional savings. Happy shopping!

How to use coupons effectively

Here are some strategies you can implement to use coupons the right way.

1. Start small

A dollar’s savings here and there may not seem like much, but when you add it all up at the end of the month, you’d be surprised at how much you saved.

By starting small, you’ll get to test the waters to see which coupons work for you and how to put them to use in the most convenient and effective way.

You’ll discover more ways to find coupons from your favorite brands so that you can enjoy maximum savings on your purchases.

2. Learn your shopping behaviors and routines

You’ll be surprised to find that you shop at certain brands and stores more often than you think.

When you make a conscious effort to track the shops that you purchase from on a monthly basis, you can sign up for the email lists and loyalty programs of these brands.

In 2021, 53% of U.S. consumers saw instant discounts as one of the main benefits of joining loyalty programs.

graph showing the leading benefits that motivate consumers to invest in loyalty programs

Therefore, signing up for the right loyalty programs can give you special discounts and offers that you wouldn’t have received otherwise.

3. Choose your products first

To make the process of finding coupon codes easier, you need to know which products you want so that you know exactly which type of coupons you need to search for.

This way, you'll be able to use all discount avenues: Firstly, getting discounts from loyalty programs, then becoming a member of cashback websites, and finally, stacking your coupons on top of that.

Though this method is time-consuming, it can give you massive savings of up to hundreds of dollars each month.

4. Develop a process

Contrary to popular belief, you don’t have to buy in bulk to enjoy savings. By incorporating coupons into your everyday life, you have control over the amount of money that you spend on many of your purchases.

You may not have control over your childcare fees or the amount you have to pay for mortgage and rent, but you do have control over the amount that you spend on your personal care items, groceries, entertainment items, etc.

Find amazing coupon codes that’ll give you great deals here.

Enjoy great savings

Using promo codes is an excellent and effortless way to save a lot of money. By using the methods mentioned in this article, you’ll find coupons for different products and services from your favorite brands.

Want to discover more effective ways to find promo codes? Head over to this article that’ll give you five additional methods that you can try today.

about the author

Marc Mezzacca
Marc Mezzacca is CEO of CouponFollow, a consumer savings engine that surfaces popular coupons. He has been in the coupon and deals industry for over a decade with a deep interest in evolving e-commerce technologies.