Coupon Code Definition & Meaning

A coupon code, also referred to as a promo code, is a computer-generated code consisting of letters and/or numbers that is used on an e-commerce website. When a user enters a coupon code into the corresponding field, they receive a discount, whether that is a fixed discount, a percentage off the entire purchase price, free shipping, or any other discount as advertised by the merchant.

Coupon codes can be obtained by consumers from advertisements, reaching a specific dollar amount when a purchase is made, or as an incentive for being referred by an existing customer.

Online merchants offer coupon codes as an incentive to shoppers to purchase from their website. It benefits both sides customers save money on the products they want, and merchants generate revenue. Coupon codes work well with both new and returning customers and are an effective way to track marketing efforts. Merchants can track their efforts by attaching specific coupon codes to specific marketing campaigns or advertisements. This will reveal which platforms generate the most traffic or lead to the most conversions.

Coupon code types

There are three types of coupon codes online merchants can offer. As a general rule, it’s best to use all three types to ensure a variety of customers.

  • Public codes are codes that anyone can see or use. They are sometimes displayed on the website’s home page and are valuable for attracting new customers and encouraging shoppers to return.
  • Private codes are used to target a specific group of people. These could be provided to loyal customers for special shopping opportunities or first-time shoppers to build a relational base.
  • Restricted codes target a single use and can only be used once. For example, a code couple be sent to a customer as an apology for a delayed shipment or as a thank-you for referring a friend who made a purchase.

Coupon code sites

In addition to finding codes offered directly by an online merchant, there are multiple websites that track new coupon offers from merchants, such as RetailMeNot and Coupon Cabin. These sites typically aggregate thousands of current coupon codes into one, centralized place. Users can search for retailers and display coupon codes that may or may not be valid. The success rate of specific coupon codes are also shown.

Abby Dykes
Abby Dykes
Abby Dykes is a newly-graduated writer and editor for websites such as TechnologyAdvice.com, Webopedia.com, and Project-Management.com. When she’s not writing about technology, she enjoys giving too many treats to her dog and coaching part-time at her local gym.

Top Articles

Huge List Of Texting and Online Chat Abbreviations

From A3 to ZZZ we list 1,559 text message and online chat abbreviations to help you translate and understand today's texting lingo. Includes Top...

How To Create A Desktop Shortcut To A Website

This Webopedia guide will show you how to create a desktop shortcut to a website using Firefox, Chrome or Internet Explorer (IE). Creating a desktop...

The History Of Windows Operating Systems

Microsoft Windows is a family of operating systems. We look at the history of Microsoft's Windows operating systems (Windows OS) from 1985 to present...

Hotmail [Outlook] Email Accounts

  By Vangie Beal Hotmail is one of the first public webmail services that can be accessed from any web browser. Prior to Hotmail and its...

Cybersecurity Awareness Training Definition...

Cybersecurity awareness training informs employees of the attack surfaces and vectors in their...

Supply Chain Definition &...

A supply chain is a network between an organization and its suppliers to...

Relational Database Definition &...

A relational database stores and connects data in tables and columns, emphasizing the...