What Is GWP (Gift With Purchase)? Gift vs Discount

How a Gift With Purchase Works

Every GWP offer has two parts: a condition and a gift. Meet the condition and the gift ships with the order.

Common conditions:

Spend a set amount. “Spend $75, get a free tote bag.”
Buy a certain product. “Buy the serum, get a free travel cleanser.”
Buy a set number of items. “Buy 3 candles, get a free candle snuffer.”

It’s often a sample or small extra that goes with what the shopper already wants.

You add to the order instead of cutting the price. Prices stay put, which matters if you don’t want shoppers waiting for your next sale. A spend level also gives shoppers a reason to add one more item.

Free Gift or 20% Off? The Margin Math

Say a skincare store wants an offer for orders of $75 or more. Its products cost about 40% of the price. The gift is a travel-size cleanser that sells for $15 and costs the store $4.

On a $75 order	No offer	20% off	Free cleanser
Customer pays	$75	$60	$75
Product cost	$30	$30	$34 ($30 + $4 gift)
Gross profit	$45	$30	$41

Both offers hand the shopper about $15 of value. The gift keeps $11 more profit per order ($41 vs. $30). A discount gives away revenue, but a gift only costs what you paid for it.

But this only works if the gift pulls shoppers in as well as $15 off would. A cleanser nobody asked for can feel worth far less than $15 in cash. Shipping and packaging aren’t counted here, and a heavy gift adds to both.

When a Free Gift Doesn’t Pay Off

It goes to orders you’d get anyway. If 200 orders a month already top $75, that’s 200 × $4 = $800 a month in gifts before you win one extra sale. It helps to know how dedicated buyers differ from walk-away customers.
The spend level is in the wrong place. Below your usual order size, lots of orders qualify with no change. Far above it, few shoppers even try.
Nobody wants the gift. Old stock can look like you’re clearing shelves. It adds cost but no pull.
The gift runs out. If it sells out mid-promotion, shoppers who expected it get upset.

Gift With Purchase on Shopify

Shopify’s built-in way is a Buy X Get Y discount. You set what the shopper has to buy or spend, then make the gift free. It can run as one of your automatic discounts, so no code is needed.

The discount only makes the gift free once it’s in the cart. So who puts it there, the shopper or an app? If it’s the shopper, say so clearly or some will miss it. For apps, see our list of the best Shopify discount apps.

The gift shows up as its own line item, so it gets picked and packed. In Shopify’s sales reports, a regular product made free by a discount adds its price to gross sales and the same amount to discounts. The two cancel out, so net sales don’t move.

Our app, Growth Suite, has free gift offers built into its cart drawer. To build your own offer, read our Shopify free gift with purchase guide.

The “A Gift Is Always Cheaper” Myth

Many assume a gift always beats a discount on cost. Per order, it often does. But you pay for the gift on every order that qualifies, not just the ones it wins. If it doesn’t change what people buy, it’s just a cost.

GWP isn’t BOGO (Buy One, Get One), either. With BOGO, the free item is usually another unit of what they’re buying. A GWP gift is usually something different you pick.

Terms Related to Gift With Purchase

Average Order Value (AOV): what a spend-based gift aims to raise.
Free Shipping Threshold: the same “spend $X to qualify” idea, with shipping as the reward.
Cost of Goods Sold (COGS): what the gift really costs you.
Cart Drawer: a side cart that can show gift offers.