Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Net margin impact of promo
$10,000
Truly incremental orders
2,250
Cannibalized (would've bought anyway)
2,750
Break-even incrementality rate needed
40.0%
Margin per discounted order
$24.00
Psst — share this and help Rex grow
One click, a permanent link with your numbers baked in.
How to use this
- 1Enter promo code redemptions.
- 2Enter average order value ($).
- 3Enter discount percentage (%).
- 4Enter gross margin at full price (%).
- 5Enter estimated incrementality rate (%).
- 6Read your net margin impact of promo on the right — it updates as you type.
- 7Hit Share to keep the scenario or send it to someone.
About this calculator
A promo code that converts 5,000 orders looks like a win until you account for how many of those buyers would have paid full price without it. This calculator estimates cannibalization by comparing your promo redemption rate against a baseline full-price conversion rate for a similar audience, then splits redeemed orders into incremental (the discount caused the purchase) and cannibalized (the customer would have bought anyway, so the discount is pure margin loss). It computes the net margin impact: incremental orders contribute discounted margin, cannibalized orders lose the full discount amount versus what you'd have earned at full price. The output includes a break-even incrementality rate — the minimum share of orders that must be truly incremental for the promo to not destroy margin versus doing nothing. Retail and e-commerce promos commonly run 30-60% incremental, meaning 40-70% of redeemers were going to buy anyway; loyalty-tier or first-purchase discounts tend to skew more incremental since they target genuinely price-sensitive or new segments. Run this before renewing recurring sitewide sales, since the habit of training your best customers to wait for a code is the slow, compounding cost that a simple 'redemptions vs. revenue' report never shows.
Worked example
Using the values the calculator loads with:
Inputs
- Promo code redemptions: 5000
- Average order value: 80 $
- Discount percentage: 20 %
- Gross margin at full price: 50 %
- Estimated incrementality rate: 45 %
Results
- Net margin impact of promo: $10,000
- Truly incremental orders: 2,250
- Cannibalized (would've bought anyway): 2,750
- Break-even incrementality rate needed: 40.0%
- Margin per discounted order: $24.00
What each field means
Inputs
- Promo code redemptions
- The promo code redemptions used in the calculation. Starts at 5000 so you have a working example on load.
- Average order value ($)
- The average order value used in the calculation, measured in $. Starts at 80 $ so you have a working example on load.
- Discount percentage (%)
- The discount percentage used in the calculation, measured in %. Starts at 20 % so you have a working example on load. Accepted range: 1–90 %.
- Gross margin at full price (%)
- The gross margin at full price used in the calculation, measured in %. Starts at 50 % so you have a working example on load. Accepted range: 1–95 %.
- Estimated incrementality rate (%)
- The estimated incrementality rate used in the calculation, measured in %. Starts at 45 % so you have a working example on load. Accepted range: 1–100 %.
Results
- Net margin impact of promo
- Returned as a money amount in US dollars and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Truly incremental orders
- Returned as a whole number. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Cannibalized (would've bought anyway)
- Returned as a whole number. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Break-even incrementality rate needed
- Returned as a percentage. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Margin per discounted order
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
How do I actually measure the incrementality rate?
Run a holdout: withhold the code from a random matched segment and compare their organic conversion rate to the redemption rate among the group that received it. The gap approximates true incrementality. Without a holdout, you're guessing, and most marketers guess too high.
Why can a promo with high redemption still lose money?
If most redeemers were going to buy at full price anyway, you're just handing back margin on orders you already had. High redemption counts feel like success but the net margin impact calculation often turns negative once cannibalization is above 60-70%, which is common for sitewide, non-targeted discount codes.
Does this apply to first-purchase-only codes the same way?
First-purchase codes tend to have much higher true incrementality, often 60-80%, because a first-time visitor without brand loyalty is genuinely more price-sensitive. The same formula applies, just plug in a higher incrementality rate estimate based on your own test data.
What's the break-even incrementality rate used for?
It tells you the minimum share of redemptions that must be truly incremental before the promo breaks even against doing nothing. If your break-even rate is 55% and your measured incrementality is only 40%, the promo is destroying margin regardless of how many people redeemed it.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
Related tools
Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). Promo Code Cannibalization Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/promo-code-cannibalization-calculator
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/promo-code-cannibalization-calculator" target="_blank" rel="noopener">Promo Code Cannibalization Calculator — RevenueLab</a> (2026).</p>
Source: [Promo Code Cannibalization Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/promo-code-cannibalization-calculator) (2026).