Fixed Amount vs Percentage Discount: Which to Use When

A fixed amount discount takes a set sum off, such as $10 off; a percentage discount takes a share, such as 20% off. On a $50 order both save $10. Which one works better depends on the price of what you sell: shoppers tend to read a percentage as bigger on cheaper items and a dollar amount as bigger on expensive ones. This guide shows what each one costs you, when to use which, and how to set both up on Shopify.

What is a fixed amount discount, and how is it different from a percentage?

Fixed amount discounts

A fixed amount discount, also called a flat discount, subtracts a set dollar amount from the price or the order total.

For example, “Take $10 off when you spend $50 or more.” The shopper sees exactly what they save, with no sum to do.

Percentage discounts

A percentage discount takes a share off the price or the order total.

Example: “Save 15% on your entire order.” The saving grows with the cart: 15% off $40 is $6, and 15% off $200 is $30.

Fixed amount or percentage: side by side

	Fixed amount ($10 off)	Percentage (20% off)
What the shopper sees	A clear dollar saving	A share of the price
Reads bigger on	Items over $100	Items under $100
Cost to you per order	The same on every order	Grows with the cart
Pairs well with	A minimum spend, like "$10 off orders over $50"	A whole collection or a storewide sale
Watch out for	Small carts where $10 is most of the margin	Big carts where the saving gets larger than you planned

For how deep a percentage should go, see the most effective discount percentage.

Is it better to discount by percentage or by a fixed amount?

It depends on what the discount is for:

A fixed amount suits an order discount with a minimum spend. "$10 off orders over $50" gives shoppers a target and caps your cost per order at $10.
A percentage suits a storewide sale or a whole collection, because one number works at every price and the saving grows with the order.

Templates for both discount types

Two set-ups you can copy into Shopify's Discounts page. In Discounty, a per-customer usage limit exists only on code campaigns, such as Advanced discount code (Essential plan and up).

Fixed amount template

Discount name: “$10 off orders over $50.”
Applies to: Specific collections, like summer sale items.
Minimum spend: $50.
Usage limit: once per customer (discount codes only).

Percentage template

Discount name: “15% off orders over $100.”
Applies to: Entire cart or specific products.
Minimum spend: $100.
Combinations: leave it off unless your margin can take a second discount on the same order.

Tips for both

Be clear: Choose discount names that are short, specific, and easy for customers to understand.
Protect your margin: add a minimum spend, so a discount never takes more than a set share of the order.
Give it an end date: set one on the discount, and in Discounty show it with a countdown timer (Essential plan and up).

Which reads bigger: two examples

A $20 product

You sell a $20 T-shirt.

Fixed amount: “$5 off” drops the price to $15.
Percentage: “25% off” also brings it to $15, and 25 is a bigger number than 5.

A $1,000 product

You sell a $1,000 laptop.

Fixed amount: “$100 off” saves $100.
Percentage: “10% off” saves the same $100, and here 100 is the bigger number.

Takeaway: Jonah Berger, a marketing professor at the Wharton School, calls this the Rule of 100 in his book Contagious (2013). Under $100, a percentage looks bigger; over $100, a dollar amount does. So on the T-shirt, lead with 25% off; on the laptop, lead with $100 off. Sally McKechnie and colleagues at Nottingham University Business School found the same pattern for high-priced products: shoppers valued an amount off more than the same saving as a percentage (European Journal of Marketing, 2012).

How to set up a “2 for $20” offer on Shopify

Discounts created on Shopify's Discounts page take an amount or a percentage off; they cannot set a fixed price for two. You get the same result with a fixed amount off per item once the shopper buys two. For items priced $12.50, that is $2.50 off each, so two cost $20.

In Discounty, use a Quantity discount campaign:

Choose the products in the offer, all at the same price.
Set the tier to a quantity of 2, with a Fixed amount of $2.50 off each item.
Leave «Apply "fixed amount" discount only once per order» unticked, so the $2.50 comes off each item.
Set the dates, then add two items to a test cart and check the total is $20.

The tier applies from two items up, so three cost $30, $10 each. If the offer should stop at two, say "$10 each when you buy 2 or more" in your copy.

To undo it, deactivate the campaign. It shows as Reverting until the discount is removed.

When should you use each?

The right choice depends on your prices, your margin and what the discount is for.

Use a fixed amount for

A fixed budget per order: $10 off costs $10 on every order that uses it, whatever the cart.
A minimum spend: “$10 off orders over $50” sets a target and caps the cost.

Example: a store with a $60 average order runs “$10 off orders over $75”. The cost per order is known, and shoppers near $60 have a reason to add an item.

Use a percentage for

Items under $100: by the Rule of 100, 25% off a $20 item reads bigger than $5 off.
Storewide sales: one percentage works across every price in the store.

Example: a store selling $15 to $40 accessories runs 20% off a collection, one number for every price.

Or use both

Run both, matched to price. Show a percentage on items under $100 and a dollar amount on items over $100, and use a fixed amount when the discount is tied to a minimum spend.

Read More: What is Quantity Discount?

What can go wrong with each, and what helps?

The discount eats the margin

Discounts can shrink your profits if they’re too generous or applied too broadly.

Solution: Set minimum purchase thresholds. With “$10 off orders of $50 or more”, the discount is never more than 20% of the order.

Shoppers start waiting for the next one

A store that discounts on a regular rhythm tends to teach shoppers to wait for it.

Solution: Run fewer, dated sales, such as seasonal events or a store anniversary, and give each one an end.

Shoppers cannot tell what they save

Shoppers who cannot tell what they will save, or when, tend to hold off.

Solution: Say it in one line, such as “$10 off orders over $50, applied at checkout.”

Selling to shoppers in other currencies

Shopify's Help Center says fixed-amount discounts are set in your store's currency and converted at checkout, so their value moves with exchange rates. A $10 discount can be a different number of euros from one day to the next. Percentage discounts have no currency attached and apply the same share in every currency. If you sell across markets, a percentage is easier to advertise in every currency.

Test before you settle

Test both: run the same offer as a fixed amount and as a percentage on comparable products, and compare orders and margin.
Watch the numbers: watch how many orders use the discount, the conversion rate and the average order value.
Combine with care: allow two discounts on one order only if your margin covers both. In Discounty, combining campaigns is on the Discounty plan and up.

Read More: Increase AOV With Discount

Which should you use?

Use a percentage on items under $100 and across storewide sales and multi-currency stores. Use a fixed amount on items over $100 and whenever the discount comes with a minimum spend, so the cost per order stays fixed. Discounty runs both, in Bulk price editor and Quantity discount campaigns, and in Advanced discount code campaigns on the Essential plan and up.

Questions

1. Is $20 off or 20% off better?

It depends on the price. On a $100 item they save the same $20. Below $100, $20 off is the bigger saving; above $100, 20% off is. For how it reads, Jonah Berger's Rule of 100 says a percentage looks bigger under $100 and a dollar amount looks bigger over it.

2. Can I use both fixed and percentage discounts on Shopify?

Yes. Shopify's Discounts page offers both, and a discount applies alongside another only when both are set to combine. Discounty campaigns also offer both value types; combining Discounty campaigns with each other is on the Discounty plan and up.

3. How do fixed amount and percentage discounts affect profit differently?

A fixed amount costs the same on every order; a percentage costs more as the order grows. With a $60 average order, $10 off and about 17% off cost the same on an average order, but on a $150 order the percentage costs $25 against the fixed $10.