The Self-reference effect of discount codes

Discount codes are widely used in the consumer market and can take different forms. Personalized name codes are generated based on the recipient’s name or initials (e.g., ADAM20 or ASTHANKYOU), while general codes do not include name elements and can be readily understood by the recipient in terms of the purpose and meaning of the codes (e.g., SAVED10 or SUMMER20). Aligning with the self-reference effect, we show that consumers perceive the personalized name code as more unique than the general code, which in turn increases perceived exclusivity and leads consumers to evaluate the deal more favourably. On the other hand, when the code includes a person’s name, it triggers concerns about privacy, which negatively affects deal evaluations. The two opposing processes cancel each other out, resulting in a nonsignificant total effect of personalized name codes on deal evaluations. These results shed light on the cognitive processes underlying consumers’ evaluations of discount codes. By understanding the processes involved, practitioners can optimize their discount code strategies to increase click-through rates and, subsequently, improve redemption rates for discount codes.