What's the cost difference between percentage and fixed-amount discounts?

Cost Difference: Percentage vs. Fixed-Amount Discounts

Percentage and fixed-amount discounts can be identical in cost on specific price points, but they diverge significantly when applied to a range of order values. Understanding when each format is more cost-efficient - and when each converts better - helps you choose the right structure for your products and campaigns.

Cost Comparison Across Order Values

The Uncapped Risk of Percentage Discounts

A critical risk with percentage discounts: if customers add more items to reach a higher order value while using a percentage code, your discount cost scales with their cart size. A 20% off code on a $200 cart costs you $40 - four times your budget if you were thinking about a typical $50 order.

Fixed-amount discounts cap your exposure. A $10 off code costs $10 regardless of whether the cart is $50 or $200. For behavioral exit-intent offers where you don't control the cart contents, fixed amounts are safer for margin.

Conversion vs. Margin Trade-off

• Low-AOV products: 20% off outperforms $5 off psychologically even if cost is similar; percentages feel larger on small amounts
• High-AOV products: "$20 off" feels more concrete than "17% off $120"; fixed amounts win at premium price points
• Bundles: Always use fixed amounts; percentage off a bundle with varied product prices is confusing to customers

Growth Suite's A/B Testing Module in Trigger Campaigns lets you test percentage vs. fixed-amount framing on the same discount depth to find which converts better for your specific price point and audience - the winner is often surprising and product-category specific.