Free Shipping Rewards

Overview

Free Shipping Rewards allow customers to redeem loyalty points for discount codes that eliminate shipping costs on their orders. These rewards support subscription handling, minimum requirements, geographic targeting, and shipping rate exclusions.

Free shipping is one of the most popular loyalty rewards, as it provides clear, immediate value and removes a common purchase barrier.

Restricted Rewards

Free shipping rewards can be created as restricted rewards for internal features like Referrals. Restricted rewards are:

• Not visible to customers in the public rewards catalog
• Have no points cost associated with them
• Claimed automatically by features (e.g., when a friend claims a referral offer)

To create a restricted reward, select the "Create Restricted Reward" option when creating a free shipping reward.

How It Works

When a customer claims a free shipping reward:

1. They receive a unique discount code
2. At checkout, they enter the code
3. All eligible shipping costs are reduced to $0
4. Order proceeds with free shipping

Note: Free shipping discounts apply to standard shipping rates. Expedited or premium shipping may not be fully covered depending on your configuration.

Payment Type Options

One-Time Payments Only

Free shipping applies exclusively to one-time purchases.

Use Case: Reward occasional purchases without affecting subscription shipping economics.

Subscriptions Only

Free shipping applies exclusively to subscription orders.

Subscription Application Options:

Option	Description	Example
First Payment Only	Free shipping on the initial subscription delivery	Free shipping on first subscription box
Multiple Recurring Payments	Free shipping on a specified number of deliveries	Free shipping on first 3 deliveries
All Recurring Payments	Free shipping on every delivery for the subscription duration	Free shipping on all monthly deliveries

Use Case: Remove shipping friction for subscription signups or reward long-term subscribers.

Both

Free shipping applies to both one-time purchases and subscriptions.

Flexibility: Configure different subscription behaviors when both are selected.

Minimum Requirements

Set conditions that must be met for free shipping to apply:

Minimum Order Value

Require a minimum order total before free shipping applies.

Configuration:

• Set minimum amount (e.g., $35)
• Calculated based on order subtotal (before shipping and taxes)
• Free shipping won't apply if order is below threshold

Example: "Spend $35 or more to get free shipping"

Strategic Use:

• Set minimum near your average order value to encourage larger purchases
• Common thresholds: $25, $35, $50, $75

Minimum Item Quantity

Require a minimum number of items in the cart.

Configuration:

• Set minimum quantity (e.g., 3 items)
• All items in cart count toward quantity
• Free shipping won't apply if cart contains fewer items

Example: "Add 3 or more items to get free shipping"

Strategic Use:

• Encourage multi-item purchases
• Drive discovery of additional products

None

No minimum requirements - free shipping applies to any order.

Strategic Use:

• Premium reward for high-point customers
• Special promotions or VIP tiers
• Service recovery

Profitability

Setting minimum requirements helps offset shipping costs. Calculate your average shipping cost and set minimums that maintain profitability while providing value.

Customer Eligibility

Control who can see and claim this reward:

All Customers

The reward is visible and claimable by any customer in your loyalty program.

Use Case: General free shipping promotion for all members.

Specific Customers

Select individual customers who can access this reward.

Configuration:

• Search for customers by name or email
• Add multiple customers individually
• Only selected customers see the reward

Use Case: VIP perks, service recovery, personalized offers.

Specific Customer Segment

Target customer segments created in Shopify.

Configuration:

• Select from Shopify customer segments
• Segments are created and managed in Shopify admin
• Use Shopify's segmentation tools to define criteria

Common Segment Examples:

• Customers who spent over $500 lifetime
• Customers with 5+ orders
• VIP tier customers
• Customers who haven't purchased in 90 days

Use Case: Tier-specific benefits, targeted campaigns, re-engagement offers.

Shopify Customer Segments

Customer segments are created in Shopify admin > Customers > Segments. Learn more in Shopify's customer segmentation documentation.

Maximum Usage Limits

Customers can claim this reward multiple times. These settings control how many times each claimed discount code can be used and how many times the reward can be claimed overall.

Uses Per Discount Code

Default: 1 use per code

Control how many times each claimed discount code can be used before it's depleted:

Setting	Behavior
1 (Default)	Each discount code can be used once
Custom Number	Each discount code can be used N times

Important: After a discount code is fully used, the customer can claim the reward again (if they have enough points) to receive a new discount code.

Example:

Reward: Free Shipping (300 points)
Uses per code: 1

Customer Journey:
1. Customer claims reward → receives code SHIP123 (300 points deducted)
2. Customer uses code SHIP123 on Order #1 → code depleted
3. Customer claims reward again → receives code SHIP456 (300 points deducted)
4. Customer uses code SHIP456 on Order #2 → code depleted

Strategic Consideration:

• Single use: Encourages earning more points for repeat benefits
• Multiple uses: Provides value over several orders before needing to reclaim

Discount Combinations

Control whether free shipping can be stacked with other discounts:

Combinable With

Combination	Description
Order Discounts	Free shipping + order-level discounts
Product Discounts	Free shipping + product-specific discounts

Common Combination Strategies

Maximum Value (Recommended):

• Enable order discount combinations
• Enable product discount combinations
• Disable shipping discount combinations
• Result: Customers get free shipping plus other savings

Exclusive Shipping:

• Disable all combinations
• Result: Only free shipping applies (useful if margin is tight)

Customer Experience

Allowing combinations with order and product discounts provides the best customer experience and maximizes order value.

Geographic Targeting

Country Selection

Specify which countries qualify for free shipping:

Configuration:

• Select one or multiple countries
• Comprehensive country list available
• Free shipping only applies to selected countries

Validation at Checkout:

1. Customer enters shipping address
2. System checks if country is eligible
3. If eligible: Free shipping applies
4. If not eligible: Standard shipping rates apply, code won't work

Strategic Use:

Strategy	Configuration	Use Case
Domestic Only	Single country (your primary market)	Control shipping costs
Regional	Multiple countries in region	Expand reach strategically
Global	All countries	Premium customer experience

Example:

Free Shipping Reward: "Free US Shipping"
Points: 300 points
Countries: United States
Result: Only customers shipping to US addresses can use this code

Multi-Country Rewards

Create different rewards for different regions:

Example Strategy:

• Reward A: Free US Shipping (300 points, US only)
• Reward B: Free Canada Shipping (400 points, Canada only)
• Reward C: Free International Shipping (600 points, all other countries)

Benefits:

• Point costs reflect actual shipping costs
• Customers see relevant rewards
• Better cost control

Country Changes

If a customer claims a reward but changes their shipping country at checkout to an ineligible country, the discount code will not apply.

Shipping Rate Exclusions

Exclude free shipping for shipping costs above a certain value.

Configuration:

• Set maximum shipping cost threshold (e.g., $15)
• Free shipping applies only when shipping cost is at or below this threshold
• Orders with shipping costs above the threshold will not qualify for free shipping

Use Case: Control shipping cost exposure by excluding expensive shipping options.

Example:

Maximum shipping threshold: $15.00

Scenario 1:
Standard Shipping: $8.00 (below threshold)
Discount: -$8.00
Customer pays: $0.00 ✓ Free shipping applies

Scenario 2:
Express Shipping: $25.00 (above threshold)
Discount: $0.00
Customer pays: $25.00 ✗ Does not qualify

Setup Process

Step 1: Navigate to Coupon Rewards

1. Open Keystone Loyalty Rewards app
2. Navigate to Loyalty Program > Reward types > Coupon Rewards
3. Click Create Discount
4. Select Free Shipping

Step 2: Configure Basic Settings

Field	Description
Reward Name	Name customers see (e.g., "Free Shipping")
Points Required	Points cost to claim this reward

Step 3: Set Payment Type

Choose one:

• One-time payments only
• Subscriptions only (configure subscription behavior)
• Both

If subscriptions are included, select:

• First payment only
• Multiple recurring payments (specify number)
• All recurring payments

Step 4: Define Minimum Requirements

Choose one:

• Minimum order value (enter amount)
• Minimum item quantity (enter number)
• None

Step 5: Set Customer Eligibility

Choose one:

• All customers
• Specific customers (search and select)
• Specific customer segment (choose segment)

Step 6: Configure Usage Limits

Set:

• Maximum uses per discount code (default: 1)

Step 7: Select Discount Combinations

Enable combinations with:

• Order discounts
• Product discounts
• Other shipping discounts (typically disabled)

Step 8: Configure Geographic Targeting

1. Select eligible countries
2. Choose one, multiple, or all countries
3. Consider creating separate rewards for different regions

Step 9: Set Shipping Rate Exclusions (Optional)

Configure:

• Maximum shipping cost threshold
• Orders with shipping costs above this threshold won't qualify for free shipping

Step 10: Review and Save

1. Review all settings
2. Verify country and exclusion configuration
3. Click Save Reward
4. The reward is now available for customers to claim

How Customers Claim and Use

Claiming the Reward

1. Customer views available free shipping rewards
2. Customer sees point cost and any conditions (minimum, countries)
3. Customer has sufficient points
4. Customer clicks "Claim Reward"
5. Points are deducted from their balance
6. Unique discount code is generated

Using the Discount Code

1. Customer adds items to cart
2. Customer proceeds to checkout
3. Customer enters shipping address in eligible country
4. Customer enters discount code
5. System validates:
   • Minimum requirements met
   • Shipping address in eligible country
   • Shipping method qualifies (if exclusions set)
6. Shipping cost reduced to $0 (or to remaining balance if max coverage applies)

Checkout Display

When free shipping applies:

Subtotal: $50.00
Shipping: $8.00 $0.00
Discount (FREE-SHIP-ABC): -$8.00
──────────────────────────
Total: $50.00
You saved $8.00 on shipping!

Refunds and Reversals

Automatic Refunds

Points are automatically refunded to customers in these scenarios:

Scenario	Refund Behavior
Discount code deleted	Full point refund if unused
Reward deleted	Full point refund for all unused codes

Manual Refunds

Customers and merchants can manually refund claimed discount codes to return points.

Customer-Initiated Refunds

Customers can refund their claimed discount codes through the loyalty widget or their account:

Eligibility:

• Discount code has not been fully redeemed (uses remaining)
• Customer has the discount code in their account

Process:

1. Customer views their claimed rewards
2. Customer selects the discount code to refund
3. Customer confirms refund
4. Points are returned to customer's balance
5. Discount code is deactivated/deleted

Refund Amount:

Code Status	Points Refunded
Unused (0 uses)	Full points refunded
Partially used	Points refunded proportionally based on remaining uses
Fully used	Cannot be refunded

Example:

Reward: Free Shipping (300 points)
Uses per code: 3 uses
Code status: Used 1 time, 2 uses remaining

Refund calculation:
Remaining uses: 2 out of 3 (66.67%)
Points refunded: 300 × (2/3) = 200 points

Merchant-Initiated Refunds

Merchants can refund discount codes on behalf of customers:

Use Cases:

• Customer service requests
• Customer unable to use due to shipping restrictions
• Technical issues preventing use
• Goodwill gestures

Process:

1. Navigate to Loyalty Program > Customers
2. Select the customer
3. View their claimed rewards/transactions
4. Select the discount code to refund
5. Confirm refund
6. Points are returned to customer's balance
7. Discount code is deactivated/deleted

Same refund calculation applies: Full refund for unused codes, proportional refund for partially used codes.

Best Practice

Communicate with customers about refunds. If a merchant refunds a code, consider sending a notification explaining why points were returned.

Shopify Synchronization

Discount Creation

When a customer claims a free shipping reward:

1. App creates discount code in Shopify admin
2. Discount configured as shipping discount type
3. Code is linked to customer and transaction
4. Code is immediately usable at checkout

Use Cases

1. Basic Free Shipping

Configuration:

• Points: 300 points
• Payment type: One-time only
• Minimum: $25 order value
• Countries: Domestic only
• Eligibility: All customers
• Max uses: 1 per customer

Goal: Simple, accessible free shipping reward for most customers.

2. VIP Free Shipping

Configuration:

• Points: 500 points
• Payment type: Both
• Minimum: None
• Countries: All countries
• Eligibility: Gold tier only
• Max uses per code: 5

Goal: Premium benefit for top-tier customers.

3. Subscription Free Shipping

Configuration:

• Points: 600 points
• Payment type: Subscriptions only (all payments)
• Minimum: None
• Countries: Domestic
• Eligibility: All customers
• Max uses: 1 per customer

Goal: Remove shipping friction for subscription signups.

4. Regional Free Shipping

Configuration:

• Points: 250 points (US), 350 points (Canada), 500 points (International)
• Create 3 separate rewards
• Minimum: $30 order value
• Eligibility: All customers

Goal: Offer free shipping globally with region-appropriate point costs.

5. High-Value Order Free Shipping

Configuration:

• Points: 200 points
• Payment type: One-time
• Minimum: $100 order value
• Countries: Domestic
• Eligibility: All customers
• Combinations: Stack with order discounts

Goal: Reward large purchases with both free shipping and potential additional discounts.

Best Practices

1. Set Appropriate Point Costs

Align point cost with average shipping expense:

Formula:

Point Cost = (Average Shipping Cost × Points-Per-Dollar Rate) × Margin Factor

Example:
Average shipping: $8.00
Points per $1 spent: 10 points
Margin factor: 1.25 (to maintain profitability)
Point cost: $8 × 10 × 1.25 = 100 points

2. Use Geographic Targeting Strategically

Balance customer satisfaction with cost control:

Recommendations:

• Start with domestic free shipping
• Expand to nearby countries with reasonable shipping costs
• Create tiered rewards for expensive shipping regions
• Communicate country restrictions clearly

3. Set Smart Minimums

Protect margins while providing value:

Guidelines:

• Set minimum near average order value
• Higher minimums justify lower point costs
• No minimum for VIP tiers (premium experience)

Example Strategy:

• Standard: Free shipping on $35+, 300 points
• Premium: Free shipping on $25+, 400 points
• VIP: Free shipping any order, 500 points (5 uses per code)

4. Set Shipping Threshold Strategically

Use maximum shipping cost threshold to control expenses:

Benefits:

• Predictable shipping expenses
• Automatically excludes expensive shipping options
• Still provides significant value for standard shipping
• Customers can choose expedited shipping (they pay full cost)

Example: Set threshold at $15 to cover standard shipping but exclude express/overnight options.

5. Monitor Redemption Economics

Track the profitability of free shipping rewards:

Key Metrics:

• Average shipping cost per free shipping order
• Total point cost vs. total shipping cost
• Attach rate (what else customers buy)
• Redemption rate by customer segment

Related Features

• Order Discount Rewards - Cart-wide discounts
• Product Discount Rewards - Product-specific discounts
• Gift Card Rewards - Gift card generation
• Customer Tiers - Segment-based eligibility
• Transactions - View reward claims and usage

Summary

Free Shipping Rewards remove a common purchase barrier and provide clear, immediate value to customers. With support for geographic targeting, shipping rate exclusions, subscription handling, and flexible minimum requirements, you can create free shipping rewards that drive conversions while maintaining profitability.

The automatic Shopify sync ensures seamless redemption, and the built-in verification process guarantees customers always receive functioning discount codes.