Written by DROPS.ST.
Price the reward against the contribution left on the order, then ask how many genuinely additional orders are needed to pay for the whole offer. Revenue alone cannot tell you whether a customer reward is affordable. Neither can the face value of credits issued without considering their redemption.
DROPS gives merchants customer accounts, wallet activity and follow-up tools that can support a repeat-purchase offer. Those features make the offer easier to operate and explain. The reward amount still has to fit your products, variable costs and business rules. Build the economics before writing the promotion.
Start with one redeemed order
Here is an illustrative order in a shop's reporting currency. Values exclude sales tax and use consistent treatment of delivery charges. “Contribution” means the amount left after the listed variable costs, before fixed overhead and profit.
| Item | Amount |
|---|---|
| Merchandise price before reward | 60.00 |
| Cost of goods | −30.00 |
| Payment and order handling cost | −3.00 |
| Packaging and delivery subsidy | −5.00 |
| Contribution before reward | 22.00 |
| Reward redeemed | −8.00 |
| Contribution after reward | 14.00 |
The eight-unit reward consumes 8 ÷ 22 = 36.4% of the original contribution. Calling it “only 13.3% of the order value” gives a much more flattering impression. Both percentages are arithmetically correct, but only one shows how much room the reward uses.
If a reward also increases fulfillment cost or applies to a lower-margin basket, calculate that scenario separately. Minimum spend is useful only when the qualifying basket still leaves enough contribution.
Distinguish credit issued from credit used
Suppose you issue 8 units of promotional credit to 100 eligible customers. The total face value is 800. If 30 customers redeem the full amount during the measured period, recorded redemptions are 30 × 8 = 240.
That does not mean the remaining 560 has vanished. Some customers may redeem later under the offer's rules. Keep outstanding promotional value visible and use appropriate accounting treatment for your situation. Prepaid customer money and promotional credit are also different obligations; do not combine them merely because both appear in a wallet.
The prepaid wallet and rewards guide explains the customer-facing distinction. Your offer should make the amount, eligibility and redemption conditions understandable before someone decides to participate.
Ask how many extra orders cover the discount cost
Now return to the 30 redeemed orders and assume the same 22-unit contribution before reward. If 20 customers would have ordered anyway, discounting those orders costs 20 × 8 = 160. Ten genuinely additional orders contribute 10 × 14 = 140 after their rewards. Under these illustrative assumptions, the offer leaves the shop 20 units worse off, before campaign work.
For 30 redemptions, the incremental contribution calculation is 22 × additional orders − 240. The break-even count is 240 ÷ 22 = 10.91, so at least 11 additional orders would be needed under this simplified model. That threshold rises when campaign labor or other costs are added.
You rarely observe the “would have ordered anyway” group directly. Use a fair comparison where practical and report the uncertainty. A redemption report measures use of the reward; it does not prove incremental sales.
Put the offer into a basket before you approve it
Test a low-margin qualifying basket, a typical basket and a larger basket. Check whether rewards combine with other promotions, how partial use works, and what happens after a cancellation or refund. Verify the actual configuration rather than assuming every control behaves the same way.
Give staff a plain explanation and a route for exceptions. A promotion that takes repeated manual corrections can lose its remaining contribution in support time. Review those costs alongside the shop's operating costs.
Make rewards earn their place in your shop. See DROPS and inspect the account, wallet and campaign controls with a worked offer in hand. Choose a reward that customers understand and your contribution can carry.