What Is a Promotional Code?

If you have ever been online shopping and skipped a box during checkout that asks you to enter a promo code, you have been losing money. With the increase in online shopping and the downward spiral of the economy, no one can afford to skip the promo code box any longer. Promotional codes can be easily obtained and save you money.

Defining Promotional Code

Promotional codes can be called many different names, including promo, coupon and discount codes. These codes are used to receive discounts on purchases. Promotional codes could be formatted to offer free shipping, a specified dollar amount deducted from the total or a percentage deducted from the total.

There are three categories of promotional codes: public, private and restricted coupons.

How Promotional Codes Work

Promotional codes act as an eligibility requirement for the discount. According to Microsoft, when a person is shopping and enters a promotion code, the corresponding discount is looked up and applied if the all the conditions of the discount are met.

For example, you may be on the checkout page of your favorite online retailer and enter a promo code for free shipping on orders over $50. The computer system will ensure your order is over $50 and verify that the code has not expired. If the requirements are met, the shipping costs will be deducted from the total.

Public Codes

Public promotional codes can be used by anyone. There is no limit to the number of times this specific code can be used. You can find public coupon codes at websites such as Retail Me Not, by clicking the coupon code tab and searching for stores of your choice.

Private Codes

Private promotional codes are targeted to specific people, of a particular customer segment. IBM states, "the system validates that they [purchaser] are the legal bearer of that promotion code by evaluating whether the customer is within the targeted customer segment."

For instance, the local Target may send out $5 off promotional codes for online orders to the residents of your town. All residents in your town would be allowed to use the code, however, people living in another state would not be able to redeem this promotional code.

Restricted Codes

Restricted codes are specifically designated for one person. If anyone other than the specified person attempts to use the code, the computer system will decline it, even if it is still within the expiration period.

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