Enhancing Online Purchase Behavior: The Effects of Discount Code Framing on Consumer Deal Evaluations

Discount codes are widely used in the consumer market, yet little is known about how their framing influences consumers’ evaluations of promotional offers. Based on real-world observations, I identify three distinct frames of discount code: personalized name codes (e.g., ADAM20), random codes (e.g., WX45CE6), and general codes (e.g., SAVED10). I propose that these frames influence consumers’ evaluations of the price promotion in the context of targeted offers via email through two opposite serial mediating paths: (1) perceived uniqueness leading to perceived exclusivity; and (2) perceived meaningfulness leading to processing fluency. I conducted three experimental studies to test these propositions. In Study 1, I find that in the context of targeted offers, personalized name codes and random codes are perceived to be more unique than general codes. The perceptions of greater uniqueness in turn enhance consumers’ sense of exclusivity and positively influence their evaluations of the deal. On the other hand, random codes are perceived to be less meaningful than general codes. The perceptions of reduced meaningfulness in turn pose difficulties in processing fluency and negatively influence consumers’ evaluations of the deal. In Study 2, I show, further, that privacy concerns negatively mediate the effect of personalized name codes on deal evaluations compared to general codes. Finally, in Study 3, I show that in the context of untargeted offers, general codes are perceived to be more effective than personalized name codes and random codes.

These results shed light on the cognitive processes underlying consumers’ evaluations of discount codes. This research offers valuable insights into the fields of price promotion, targeted deals, and discount framing. By understanding the processes involved, marketers and practitioners can optimize their discount code strategies to increase click-through rates and, subsequently, improve redemption rates for discount codes.