Coupon Profit Impact

Free Coupon Profit Impact calculator with clear step-by-step results.

About Coupon Profit Impact

A coupon costs full margin on every order that redeems it, including the ones that would have converted anyway. Blending redeemed and unredeemed orders gives true profit per order, and the break-even lift is the volume increase the promotion must generate before it stops destroying profit.

Formulas

Blended profit

Profit = base profit x (1 - redemption) + discounted profit x redemption

Break-even lift

Lift % = (base profit - blended profit) / blended profit x 100

Worked example

With the default values below, Coupon Profit Impact returns Net profit change per order of -$0.99. Change any input above and every figure here is recalculated in your browser.

Inputs used

Average order valueminimum 0.01 $: 75 $
Gross margin before the couponaccepts 0–100 %: 45 %
Coupon discountaccepts 0–90 %: 15 %
Share of orders using the couponaccepts 0–100 %: 40 %
Incremental orders driven by the couponaccepts 0–200 %: 12 %

Results

Net profit change per order: -$0.99
Blended profit per order with the coupon: $29.25
Profit per order without the coupon: $33.75
Order lift needed just to break even: 15.38% %

Step by step

1Values used
2Blended profit
3Break-even lift
4Net profit change per order= -$0.99
5Blended profit per order with the coupon= $29.25
6Profit per order without the coupon= $33.75
7Order lift needed just to break even= 15.38 %

Assumptions and limits

The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Why does redemption rate matter more than coupon size?

Both matter, but redemption decides how much of your existing demand you discount for free. A deep coupon redeemed by 5% of orders can cost less than a shallow one redeemed by 60%.

What lift is realistic?

Site-wide coupons often produce a lift in the single digits while cannibalising heavily. Compare the break-even figure against measured incrementality rather than total coupon orders.