Agentis analysis of Shopify's own discount-combination documentation confirms an order-level discount code combines with a free-shipping discount by default, no special setup required. On an $80 order with 40% gross margin, a 20% discount code cuts gross profit from $32 to $16, and stacking an $8 shipping cost on top drops it to $8, a 75% cut in what the order was expected to earn.
The order's full price before any discount.
Gross margin on this order before any discount.
The order-level discount code applied at checkout.
What it actually costs you to ship this order for free.
Revenue After Discount
$64.00
Gross Profit After Discount (before shipping)
$16.00
Profit Remaining After Free Shipping
$8.00
| Discount Class | Applies To | Can Combine With |
|---|---|---|
| Product discount | Specific items or collections | Other product discounts on different items. Same item only on Shopify Plus |
| Order discount | Cart subtotal, after product discounts apply | Free-shipping discounts |
| Shipping discount | Shipping cost | Nothing else. Only one shipping discount applies per order |
Source: Shopify Help Center: Combining discounts (retrieved August 7, 2026). Discounts apply in a fixed sequence: product discounts apply first to individual items, order discounts apply next to the revised subtotal, and shipping discounts apply last. That sequence is why a product discount and an order-level code compound rather than simply adding together.
| Discount Code | Free Shipping Cost | Gross Profit After Discount | Profit After Free Shipping |
|---|---|---|---|
| 0% (no promo) | $0 | $32 | $32 |
| 10% | $6 | $24 | $18 |
| 15% | $7 | $20 | $13 |
| 20% | $8 | $16 | $8 |
| 25% | $9 | $12 | $3 |
| 30% | $10 | $8 | -$2 |
Sources: Shopify Help Center: Combining discounts (retrieved August 7, 2026); USPS: Ground Advantage (retrieved August 7, 2026). Agentis synthesis: an $80 order at 40% gross margin ($48 COGS), with the discount applied to revenue before shipping cost is subtracted, matching Shopify's documented order-then-shipping sequence. Shipping-cost figures are illustrative small-package costs anchored to USPS Ground Advantage's published $7.90 starting rate, not a specific carrier quote.
How we calculate this
Shopify's own discount-combinations documentation confirms the three discount classes and their stacking rules, including that order-level codes combine with free-shipping discounts by default. The margin-impact figures are Agentis synthesis: the documented application order (product, then order, then shipping) applied to a representative order value and gross-margin assumption. Read our full methodology →
Expert Insight
Merchants budget for a discount code's face value: 20% off means 20% less revenue, full stop. What actually happens is worse, because a discount doesn't touch the cost side at all. You still pay the same COGS on that unit, so every dollar of discount comes straight out of gross profit, not out of some abstract 'discount budget.' Stack a free-shipping offer on top, since Shopify lets order-level codes combine with shipping discounts by default, and you're subtracting a real logistics cost from what little margin the discount left behind. Most merchants only notice when the order's actual profit, not its revenue, goes negative.
Udi Razmovich, CTO & Co-Founder →Yes. Shopify's own documentation states order discounts, the class a percentage-off or fixed-amount code falls into, can combine with free-shipping discounts. No special app or configuration is required, which is why a customer can apply a discount code and still see free shipping in the same checkout.
Agentis analysis of UPS's and FedEx's own published 2025-2026 peak-season surcharge schedules shows a standard residential Ground package's demand surcharge nearly doubles during the highest-volume week: from $0.40 to $0.60 at UPS, and from $0.50 to $0.80 at FedEx. USPS publishes no equivalent add-on surcharge.
Agentis analysis of Stripe's own refund documentation shows a fully refunded charge can't be disputed at all, while Stripe's processing fee is never returned either way. Refunding a $60 order costs the $2.04 processing fee you already paid. Losing that same order to a chargeback costs $75, the order value plus a $15 dispute fee.
Agentis analysis of USPS's own published Ground Advantage pricing confirms rates start at $7.90 at a Post Office location. A merchant charging a flat $4.99 shipping fee absorbs at least $2.91 of that cost per order before any packaging or handling, an amount that comes straight out of gross margin on every single sale, not just the unprofitable ones.
Agentis analysis of Shopify's own documentation confirms a customer can stack up to 5 product or order discount codes plus 1 shipping code, 6 total, on one order. Each code applies to the already-discounted subtotal, not the original price, so five stacked 10% codes cut the price by 41%, not the 50% naive addition suggests.
Agentis finds margin leaks automatically.
Data last updated August 7, 2026. Browse all Discounts & Promotions pages →