Free Gifts vs Discounts in Popup Offers: $60K/Month Case Study
Free gifts beat discounts. By a lot.
We tested popup offers for an 8-figure dog treats brand. The control was a standard 15% off popup. Never tested, never optimized. Just sitting there since launch.
The winner? A bundle of three free gifts (two Himalayan Yak Cheese Chew Dog Treats + 6" Hickory Smoked Bully Sticks) with a $60 minimum spend.
Results: +$60,000/mo revenue, +26% email capture, +25% AOV.
Here's what happened.
The Problem With "15% Off"
This brand was running a popup that said "How about 15% off?" with some copy about exclusive offers and new products.
Fine. But boring.
Every DTC brand offers 10-15% off. It's noise. Customers are numb to it.
And for a dog treats brand, there's a bigger issue: pet owners don't buy treats for themselves. They buy for their dogs. A percentage discount doesn't tap into the emotional driver of wanting to give your pet something special.
Free gifts do.
The Hypothesis
Offering a fixed dollar amount or a bundle of free gifts will increase email capture, AOV, and revenue by increasing perceived value without increasing cost to the brand.
Key phrase: without increasing cost to the brand.
The free gifts were low-cost items with high perceived value. The margin hit was minimal. The revenue lift was massive.
Test Setup
Component: Primary popup offer
Location: Sitewide
Platform: Intelligems
Test Type: A/B/n with 5 variations
Control: 15% Off
"How about 15% off?" Standard percentage discount. Green brand colors. Trust badges at the bottom.
Variation 1: $10 Off with $60 Threshold
Fixed dollar amount. "Get $10 OFF when you spend $60." Simple, concrete.
Variation 2: $20 Off with $120 Threshold
Higher discount, higher threshold. "Get $20 OFF when you spend $120."
Variation 3: Single Free Gift with $60 Threshold
"Get Free Gift" - One Himalayan Yak Cheese Chew Dog Treat with first order above $60. "Only while the stock lasts" for urgency.
Variation 4: Three Free Gifts with $60 Threshold (Winner)
"These three gifts are FREE" - Two Himalayan Yak Cheese Chew Dog Treats + 6" Hickory Smoked Bully Sticks. Same $60 threshold. Product images showing the actual gifts. "Only while the stock lasts."
Results
Winner: Variation 4 (Three Free Gifts)
| Metric | Improvement |
|---|---|
| Monthly Revenue | +$60,000 |
| Email Capture Rate | +26% |
| Average Order Value | +25% |
Three gifts beat one gift. One gift beat dollar-off. Dollar-off beat percentage-off.
The hierarchy is clear.
Why It Worked
1. Tangible beats abstract
Pet owners can visualize their dog enjoying a Himalayan Yak Cheese Chew. They can picture the bully stick.
They can't visualize 15% off.
Free gifts create a mental image. Discounts don't.
2. Three is more than one
Sounds obvious. But the jump from Variation 3 (one gift) to Variation 4 (three gifts) shows that quantity matters.
"These three gifts are FREE" hits different than "Get Free Gift."
The perceived value scales faster than the actual cost to the brand.
3. The $60 threshold was the sweet spot
Variation 2 tested a $120 threshold with $20 off. It didn't win.
Why? $120 is a stretch for a first-time buyer. $60 feels achievable. Add a couple items, you're there.
Lower threshold + higher perceived value = more conversions.
4. Scarcity added urgency
"Only while the stock lasts" is a small line. But it matters.
Creates a reason to act now instead of closing the popup and forgetting about it.
5. Product imagery made the offer real
The winning variation showed the actual gifts. You could see the treats.
The control showed a dog. Nice, but doesn't communicate the offer value.
What This Means for Personalization
This test opened up a whole personalization roadmap for the brand:
- New vs. returning visitors: New visitors get the free gifts offer. Returning customers who've already purchased might respond better to loyalty-focused messaging or different gift bundles.
- Traffic source segmentation: Visitors from dog-related content or communities might be more responsive to specific treat types. Meta traffic might need broader appeal.
- Seasonal gift bundles: Rotate the free gift bundle based on inventory, seasons, or new product launches. Keep the offer fresh without changing the structure.
We use Intelligems to run these segments simultaneously. Test once, then personalize at scale.
FAQ
Do free gifts always beat discounts?
Not always. But they tend to win when:
- The gift has high perceived value relative to its cost
- The product category is emotional (pets, kids, self-care)
- The gift is tangible and easy to visualize
For commoditized products with price-sensitive buyers, discounts might still win. Test it.
How do you choose which products to offer as free gifts?
Look for items with high perceived value and low cost to fulfill. Best sellers work well because customers already want them. Sample sizes or trial products also work because they drive future purchases.
Avoid offering your highest-margin hero products. That kills the economics.
Why didn't the higher discount with higher threshold win?
$120 is too big a commitment for a first-time visitor. The popup fires early in the session. Asking someone to mentally commit to $120 before they've even browsed is a big ask.
$60 felt achievable. That's the difference.
Should you add urgency to popup offers?
"Only while the stock lasts" worked here. It's subtle but effective.
Avoid countdown timers on popups though. They feel gimmicky and can trigger ad blindness. Soft scarcity (limited stock, limited time) tends to outperform hard urgency (timer counting down).
This test was run using Intelligems as part of a CONVERTIBLES personalization program. Want to see what free gift strategies could do for your brand? Book a call to get 3 personalized recommendations for your store.