Most discount codes now arrive addressed to one person, tied to an account and unusable by anyone else. The shift away from publicly printed codes follows from a straightforward problem with general discounts.
A public discount pays everyone
A code available to all is used by the shoppers it was meant to persuade and also by everyone who had already decided to buy.
The second group represents pure margin given away, and in most categories it is by far the larger of the two.
Targeting narrows the giveaway to the customers whose behaviour actually changes, which is the difference between a discount that pays for itself and one that does not.
The code is tied to observed behaviour
Retailers know which accounts have lapsed, which browsed without buying and which respond only to promotions.
Each pattern gets a different offer. A dormant customer may receive a large incentive to return while a frequent buyer receives nothing, because nothing is needed.
The size of an offer is therefore a rough measure of how unlikely the retailer thinks a purchase is, which inverts the usual reading of a generous discount.
Single-use codes stop the leakage
Public codes spread instantly to aggregator sites, where they are collected and applied by shoppers who were never targeted.
Binding a code to an account or making it valid once removes that route, and it lets the retailer measure precisely which offer produced which sale.
Measurement is the underrated part. A public code shows total redemptions, while a targeted one shows what each segment did.
Codes at checkout are a leak the retailer manages
A visible discount code field prompts shoppers to leave the page and search for a code, which interrupts a purchase already in progress.
Some retailers respond by hiding or relabelling the field, and others by controlling which affiliate sites are allowed to publish codes at all.
The commission paid on a code found at the last moment is often paid on a sale that would have completed anyway, which is the same problem in another form.
What targeting means for a shopper
Because offers depend on account history, the best available price varies between people in ways that are invisible from the product page.
Behaviour that signals price sensitivity, such as abandoning carts or buying only during promotions, tends to attract better offers over time.
The trade is that the same behaviour marks the account as unwilling to pay full price, and the retailer prices its future communication accordingly.