How do I set a minimum order value for a Rs 100 coupon?

A flat Rs 100 coupon is easy to understand and easy to abuse. Rs 100 off a Rs 250 order is a huge bite. The same Rs 100 off a Rs 1,500 order is barely noticeable. The fix is a minimum order value, and you can compute it rather than guess.

Start with margin per order

Say the cost of goods is 55 percent of your selling price, so the gross margin is 45 percent. Gross here means before shipping, packing and payment fees, so your final profit will be lower. Keep that in mind.

On a Rs 999 order:

• Cost: 55 percent of 999 is Rs 549.45.
• Gross margin: Rs 999 minus Rs 549.45, which is Rs 449.55.

After a Rs 100 coupon, you keep Rs 449.55 minus Rs 100, which is Rs 349.55.

Decide what you must keep

Now choose the smallest gross margin you want left after the coupon. Say Rs 200.

Let P be the order value. The margin on P is 0.45 times P. After the coupon it is 0.45 times P minus 100. You want that to be at least 200.

0.45 times P minus 100 is at least 200 0.45 times P is at least 300 P is at least Rs 666.67

So the smallest order that leaves you Rs 200 is about Rs 667. Round up to something customers recognise, such as Rs 699.

Try your own target

The same method works for any numbers. The general formula is: minimum order equals (target margin left plus coupon value) divided by gross margin rate. Here, (200 plus 100) divided by 0.45.

If you wanted Rs 150 left instead, the minimum would be (150 plus 100) divided by 0.45, about Rs 556. If you wanted Rs 300 left, it would be Rs 889.

Remember what the gross margin leaves out

The Rs 200 above is before shipping, packing and payment fee. If these cost Rs 120 in total on a typical order, your real profit after the coupon is Rs 80 on the order at Rs 667. Decide whether that is acceptable, or raise the minimum. Our post on the percent coupon profit walkthrough shows a full cost list.

Check what your store supports

In Varchas, the coupon form lets you set the code, a percentage or flat amount, an optional usage limit and an optional expiry date. I did not find a minimum order field in the coupon settings, so you cannot enforce a basket size with the coupon itself. What you can do is state the condition in your promotion text, cap total uses, and set an expiry date so it cannot run forever. If someone applies it to a small order, you would handle that manually, so choose your communication carefully.

Pair it with a threshold

A minimum for coupons and a free shipping line can interact. If you offer free delivery above Rs 499 and a Rs 100 coupon above Rs 699, a customer in between may feel confused. Plan them together. See setting a free shipping threshold from margin and coupons that actually move stock.

Keep the message simple

State the condition clearly: "Rs 100 off orders above Rs 699". A line like that sets expectations and prevents disappointed emails.

Quick recap

Work out your gross margin rate, add the coupon value to the margin you want to keep, divide by the margin rate and round up. Then check it against shipping and fees. The result is a minimum that protects your profit instead of leaving it to chance.