How To Set Up a Referral Bonus Program

A referral bonus incentivizes customers to bring shoppers to your business. Bonuses often take the form of discounts, store credit, or even cash paid to a referring customer (and sometimes the new customer) after the referred party makes their first purchase.

It’s an effective way to bring in new customers who are primed to trust your brand. A Nielsen study found that, for 88% of consumers, recommendations from people they know are the most trusted advertising channel. Referral bonuses also have a cascading effect. A 2026 ReferralCandy case study found that referred customers are 10.7 times more likely to refer people to your brand compared to non-referred customers.

This guide covers the types of successful referral bonus programs designed to help you acquire more customers and tips for creating your own referral program.

What is a referral bonus?

A referral bonus is a reward given to current customers for successfully referring their friends, family, or others to make a purchase at your business. 

Sometimes these are one-sided bonuses, where only the referring customer receives the reward. In other cases, referral bonuses are reciprocal, meaning both the current and new customer earn rewards or benefits, like store credit, discounts, or loyalty points, after the new customer makes a purchase.

Jen Yu, cofounder of the men’s skin care brand Jaxon Lane, says that rewards like a referral bonus help the brand acquire new customers while saving money they would’ve spent on ads. “Loyalty and retention are something we really started hyperfocusing on, because ad spend to get new customers has risen exponentially over the last few years,” Jen says on Shopify Masters.

Types of referral bonuses

• Cash or store credit
• Discounts
• Loyalty points
• Free products or samples
• Exclusive access or perks
• Combination program

Explore several different types of bonuses you can use to help your business get referrals.

Cash or store credit

Offering a fixed amount of cash rewards or store credit is a common ecommerce referral bonus. Polysleep CEO Jeremiah Curvers, for example, says on Shopify Masters that the company has given $25 or $50 prepaid gift cards to customers after their referred customer buys a mattress.

Cash or credit is a straightforward way to start budgeting for referral marketing, because the reward amount is typically fixed. Plus, cash appeals to customers. According to an Impact.com survey of more than 1,300 consumers, 58% said they prefer cash as a referral bonus. Store credit encourages them to come back and make another purchase.

Discounts

Customers receive a percentage discount (such as 20%) or a fixed amount (such as $10) off their next purchase. Sustainability-focused personal hygiene company Wild uses discounts for their referral program. The new customer gets a discount code for 50% off their first order, and the referring customer gets 25% off their next purchase.

“One of the biggest ways that we appeal to people who aren’t already into sustainability is through customers referring their friends,” Wild cofounder Charlie Bowes-Lyon says onShopify Masters. “Those people haven’t been sold to by us. They haven’t been sold to by an advert. They’ve been sold to by their friend who they trust.”

When Impact.com asked customers the minimum discount percentage that would motivate them to participate in a referral program, 30% said a discount of 11% to 20% and another 30% said it would take a discount of 21% to 30%.

Loyalty points

This referral bonus category involves points that customers can redeem for rewards such as discounts, free products, or gifts. Customers might earn points when they make a purchase, follow the brand on social media, post a review, or refer a new customer.

Jaxon Lane has a rewards program where customers build points in their account for buying products, making referrals, and leaving reviews, with referrals and reviews generating the most reward points. Rewards members then redeem those points for discounts (ranging from 5% to 20%) or free products, such as a travel pouch or face mask. 

Free products or samples

Giving away a small product or sample can be another hook for a referral program. While many companies accomplish this through loyalty points, some retailers send free products to existing customers after a successful referral.

Exclusive access or perks

Another popular referral bonus is offering exclusive access or VIP experiences. This could mean giving customers early access to buy a product before it goes on sale to the general public or perks like free event tickets.

Riff Raff, a retailer that makes sleep toys for babies, taps into the excitement of exclusivity for its referral program. When someone refers two friends, the new customers get a 10% discount on their first order. The existing customer receives a limited-edition toy not available for the general public to purchase.

Combination program

You don’t have to limit your business to one referral bonus method. Many ecommerce brands mix and match these tactics as part of their referral marketing strategy, delivering one format to the referring customer and another to the new customer.

Brooklinen’s referral program is an example of this combined approach. When a customer refers someone else to the brand, the existing customer has 1,000 rewards points credited to their account and the new customer gets $25 off their first purchase of $100 or more.

How to set up a referral bonus program

1. Review your budget
2. Define your goals and metrics
3. Build your referral program
4. Promote your referral program
5. Track and optimize

Use these steps and tips as a guide to set up a program that rewards customers for making referrals.

1. Review your budget 

ReferralCandy recommends using 10% to 15% of your average order value as your referral bonus total. This means that an average order value of $150, for example, corresponds to offering between $15 and $22.50.

Though you don’t need to limit your rewards program to cash bonuses. It may take some trial and error to find whether customers respond best to store credit, discounts, or some combination of rewards.

2. Define your goals and metrics

Set clear, measurable goals for what you want to accomplish. For example, this could be doubling the number of referrals received last quarter, or increasing revenue from referred customers by the end of the year.

3. Build your referral program 

Shopify apps such as Stamped, LoyaltyLion, Yotpo, and Growave help you build, activate, and manage referral programs. With Conjured Referrals, for example, retailers set the reward amount, define the triggering event (such as the referred customer making a purchase), and the app automatically grants the reward.

After customizing a program, you can connect your email platform (such as Klaviyo) to let customers know how to accrue and redeem points. Shopify Flow also automates referral program triggers, such as accrual of reward points and emails to customers after a successful referral.

4. Promote your referral program

Make sure customers know about your referral program and the bonuses they can earn. Highlight referral incentives prominently on your website, in social media posts, in post-purchase thank-you emails, and in email marketing campaigns.

5. Track and optimize

Track key metrics such as the number of referrals, revenue and average order value from referrals, retention rate, and referral conversion rate. Use apps like Conjured Referrals, which provide valuable information that you can use to adjust your campaign as needed.

A/B tests can help you determine whether tactics like a percentage discount or fixed amount is more effective. This can be as straightforward as emailing special offers with percentage discounts to some customers and fixed amounts to others, and then tailoring your strategy to the tactic that generates more referrals.