Every referral program sets two prices: what the friend gets on a first order, and what the advocate gets once that order lands. Too low and nobody shares. Too high and a referred customer costs more than one from paid search, or arrives only for the discount.
This guide is for Shopify Plus and enterprise brands setting those numbers: the published benchmarks, reward structures compared by real cost, a five-step sizing method with a worked example, and what seven brands offer in November 2026. New to referrals? Start with what a referral program is.
TL;DR: Reward each side of a referral with about 10% to 20% of your average order value, rounded to the nearest $5: $10 to $20 each at a $100 average order, as Smile's help center recommends, and in line with impact.com's 2024 benchmarks for ecommerce programs (an average reward of $27, and $20 for double-sided store credit). Keep the total cost per referred customer below what a new customer costs through paid channels. Smile is the platform that runs this approach for Shopify Plus and enterprise brands: a two-sided offer with the advocate paid in points that count toward VIP tiers, a minimum order on the friend's discount and fraud checks on every referral, as at Death Wish Coffee, whose Smile Generated Value (all orders with a rewards code) rose 186% in one year. More Shopify Plus brands run loyalty on Smile than on any other platform (Store Leads, October 2026).
Referral Reward Benchmarks at a Glance
Few sources publish reward sizes, and each measures something different.
| Benchmark | Figure | Source |
|---|---|---|
| Recommended reward per side | 10% to 20% of average order value, rounded to the nearest $5, equal on both sides | Smile Help Center, November 2026 |
| Average referral reward, ecommerce and retail programs | $27 | impact.com, State of Referral Marketing 2024 |
| Average store credit, double-sided ecommerce programs | $20 | impact.com, 2024 |
| Most common store credit reward, all industries | $10 | impact.com, 2024 |
| Most common percentage discount, all industries | 20% | impact.com, 2024 |
| Ecommerce programs that reward both sides | 94% | impact.com, 2024 |
| Ten ecommerce programs we reviewed | Friends $5 to $20 off or 15% to 25% off; advocates $10 to $20 in coupons or credit, or points worth about $5 to $10 | Our review, November 2, 2026 |
The report, from SaaSquatch by impact.com, covers more than 120 B2B and B2C programs in five industries, researched 2020 to 2023 and analyzed in spring 2023; 28% were ecommerce and retail, and the report notes small industry samples.
Two research findings set the outer limits:
- A reward well below the value it buys. In a Journal of Marketing study (Schmitt, Skiera and Van den Bulte, January 2011) of about 10,000 customers of a German bank, the bank paid €25 per referral, and referred customers were worth about €40 more over six years: roughly a 60% return, per the authors' 2013 summary.
- Bigger rewards bring weaker customers. In a field experiment with more than 160,000 bank customers, checked against about 270,000 telecom customers, larger referral rewards brought in more new customers but considerably lowered their profitability (Wolters, Schulze and Gedenk, Marketing Science, 2020).
Both are banking and telecom studies: read them as direction, not a forecast.
Referral Reward Structures and When Each Fits
The cost column prices each structure for a hypothetical brand with a $100 average order, a 60% gross margin and 65% of points redeemed (the breakage rate brands most often report is 31% to 40%, per EY's 2025 Loyalty Market Study). These are illustrations, not customer results.
| Structure | Example offer | Cost per completed referral (hypothetical) | When it fits |
|---|---|---|---|
| Equal value, points for the advocate | $15 off for the friend; 1,500 points worth $15 for the advocate | About $25: $15 plus $15 × 65% redeemed | Brands with a points program: the advocate comes back to spend, and the points can count toward VIP tiers |
| Equal give and get | Give $15, get $15 in coupons | $30 | A referral-only program; the simplest offer to share |
| Friend-weighted | $20 off for the friend, $10 for the advocate | $30 | A first order that needs a push, such as a higher-priced product |
| Percentage on both sides | 20% off the friend's first order and the advocate's next | About $40, more on bigger baskets | Wide price ranges, or when 20% matches your everyday offer |
| Free product or free shipping for the friend | A hero product that retails at $20 and costs $8 to make | $8 plus the advocate's reward | Sampling a high-margin hero product |
| Store credit or gift card for the advocate | $20 credit once the friend's order clears | $20 when spent | Higher-priced categories with frequent returns |
| One-sided, advocate only | $25 credit for the advocate | $25 | Strong existing advocacy; rare in ecommerce |
| Milestone or tiered | A bigger reward at the 3rd or 10th referral, or referral points that lift advocates into a VIP tier | The per-referral cost plus the milestone reward | Top advocates who bring many friends; cap the total |
In impact.com's 2024 data, 94% of ecommerce programs reward both sides, 55% of programs with unequal rewards give the friend more, and 20% of programs are tiered, most often with three tiers. Research by Rachel Gershon of the Rady School of Management, cited in the report, found conversion slightly higher when the referred person got the reward.
Face value is not cost: a discount costs its full value in gross profit, a free product its production cost, and points only the share members redeem. For how each reward type works, see what a referral program is.
How to Size a Referral Reward From AOV, Margin and Lifetime Value
Step 1: Start at 10% to 20% of average order value
Multiply your average order value by 10% and 20%, then round to the nearest $5: at an $80 average order, $10 or $15 a side. If first orders run smaller than repeat orders, size from first orders.
Step 2: Check that the first order still makes money
First-order gross profit = (first order value × gross margin) minus the friend's reward. At $80 and a 60% margin, a $15 discount leaves $33. If the result is near zero, lower the reward, switch to a free product, or set a minimum order near your average order value.
Step 3: Price the advocate's reward at its real cost
Advocate's real cost = face value × share redeemed for points, product cost for a free product, and face value for a coupon or credit. Check it against your earn rate too: at 1 point per $1 and 100 points to $1, a $10 referral reward equals what $1,000 of orders earns, so referring becomes the fastest way to earn.
Step 4: Cap the total with CAC and lifetime value
Total cost per referred customer = the friend's reward + the advocate's real cost. Keep it below your blended paid customer acquisition cost (CAC), and well below the gross profit a new customer brings in their first 12 months. The bank in the Journal of Marketing study paid €25 for €40 of extra customer value. To grow the value side, see how to use loyalty to improve customer lifetime value.
Step 5: Test one change and watch quality
Change one number at a time (the amount, the minimum or the advocate's currency) and compare referral conversion rate, referred orders and revenue from referred customers over at least a quarter. Watch quality as well as volume: in the Marketing Science study, larger rewards brought less profitable customers. To value the program as a whole, see how to measure loyalty program ROI.
Worked Example: Sizing a Referral Reward at an $80 Average Order
A hypothetical Shopify Plus brand with round numbers, for illustration only. Every input is an assumption, not a customer result.
| Line | Example value | How it is calculated |
|---|---|---|
| First order value | $80 | Assumption |
| Gross margin | 60% | Assumption |
| Orders in a new customer's first 12 months | 2 | Assumption |
| Paid acquisition cost per new customer | $60 | Assumption |
| Share of points redeemed | 65% | Inside EY's most reported breakage range (2025) |
| Reward per side | $15 | 10% to 20% of $80 is $8 to $16, rounded to the nearest $5 |
| Friend's reward cost | $15 | $15 off a first order of $75 or more |
| Advocate's expected cost | About $10 | 1,500 points ($15) × 65% redeemed |
| Total cost per referred customer | About $25 | $15 + $10 |
| First-order gross profit after the friend's reward | $33 | $80 × 60% minus $15 |
| 12-month gross profit after rewards | About $71 | 2 × $80 × 60% = $96, minus $25 |
| Saving against paid acquisition | About $35 per customer | $60 minus $25 |
There is room to go higher: $20 a side costs about $33, little more than half of paid acquisition. But the ceiling is not $60, since bigger rewards tend to bring less profitable customers. To price the rest of the program, see what a loyalty program costs.
Referral Rewards at Real Brands in November 2026
We read seven brands' offers on their own sites on November 9, 2026, signed out; three run on Smile. Offers change, so check before you copy one.
| Brand | Friend gets | Advocate gets | Advocate's reward in money | Limits |
|---|---|---|---|---|
| Death Wish Coffee (on Smile) | 15% off coupon | 200 points | Half a free bag of coffee (400 points buys a $20 bag) | None shown |
| Burbank Sportscards (on Smile) | $10 off coupon | $10 off coupon | $10, what $1,000 of orders earns in points | None shown |
| Mpix (on Smile) | $10 off first order | 1,000 points | $10 (100 points = $1), and the Gold level threshold | None shown |
| Our Place | $20 off a first purchase of $100 or more | 200 points | $20, as the page states | $100 minimum |
| Away (US terms) | $40 off a first purchase of $125 or more | $40 discount code | $40 | $125 minimum; 5 referrals |
| Thrive Causemetics | $15 off first purchase | $15 in points | $15 | None stated |
| Dollar Shave Club | 30% off a new subscription | 50% off one non-razor product per referral; a free product at the 10th | Varies with the product | 10 referrals |
Read on each brand's own site, November 9, 2026. Burbank Sportscards is a Shopify Plus brand. Away's Canadian terms pay 15% off to each side instead.
Every one of the seven rewards both sides. Fixed rewards run $10 to $40 a side, and five of the seven give both sides the same value. Where a minimum order applies, the friend's reward is 20% (Our Place) to 32% (Away) of it. Four pay the advocate in points; two cap rewards per advocate.
For ten more programs and where each is promoted, see the best referral programs in ecommerce, read November 2.
Common Referral Reward Mistakes
- Sizing from price instead of margin. A $20 reward on an $80 order at a 40% margin leaves $12 of gross profit.
- Paying the advocate too early. Reward on a paid order, and reverse it on a refund.
- Open-ended percentage rewards. 20% off a $600 basket is $120. If basket sizes vary widely, use a fixed amount or a minimum order.
- Copying a competitor's number. The bank study's authors advise sizing from your own customers' value instead.
How to Set Referral Rewards on Smile
Smile runs this approach for Shopify Plus and enterprise brands, with referrals, points and VIP tiers in one program (Smile referrals). The referral program is on every Smile plan; to price Smile at your volume, use the pricing calculator.
| Setting | On Smile (Smile Help Center, November 2026) |
|---|---|
| Friend's reward | Amount off, percentage off, free shipping or a free product |
| Advocate's reward | Any of those, plus a gift card, store credit or points |
| Reward value | Equal on both sides, at 10% to 20% of average order value, recommended |
| Minimum order | A minimum purchase amount on the friend's discount |
| Milestones | Points from referral rewards count toward points-based VIP tiers, and redeeming them does not lower progress (VIP from Growth) |
| Code protection | The friend's code can be locked to their Shopify customer account, and referral codes are single use |
| Expiry | Referral reward codes can expire after 3 days to 1 year (from Growth) |
| Fraud checks and refunds | Each referral is checked at claim and again at order, for similar or throwaway emails, repeat claims, many referrals from one IP address and orders placed by the advocate; flagged referrals are blocked for review, and a fully refunded order cancels the referral |
| Measurement and email | Referral conversion rate, referred orders and revenue from referred customers in Smile's analytics; each Smile Referral URL and the Referral Started and Referral Completed events in Klaviyo |
Death Wish Coffee pays advocates 200 points and gives friends 15% off, in a program whose three ranks earn 1, 3 and 5 points per $1; its Smile Generated Value (all orders with a rewards code) rose 186% in one year. ALP Pouches runs "Give $10, Get $10" (November 9, 2026) and reports more than 7,000 referral-driven orders at a 6.59% referral conversion rate. For milestone design, see how to create VIP tiers that drive revenue; to compare referral tools, see the best referral program apps for Shopify.
Frequently Asked Questions
How much should a brand reward customers for a referral? About 10% to 20% of average order value for each side, rounded to the nearest $5: $10 to $20 each at a $100 average order, as Smile's help center recommends. In impact.com's 2024 report, ecommerce and retail referral rewards averaged $27, and double-sided store credit averaged $20. Keep the total cost per referred customer below what a paid customer costs.
What percentage of order value should a referral reward be? 10% to 20% of average order value per side. Where brands set a minimum first order in November 2026, the friend's reward ran from 20% of it (Our Place, $20 off $100) to 32% (Away's US terms, $40 off $125). The most common percentage discount is 20% (impact.com, 2024).
Should the referrer and the friend get the same reward? Usually yes: equal value is easy to explain ("give $15, get $15"), and Smile's help center recommends it. When rewards are unequal, 55% of programs give the friend more (impact.com, 2024), which suits a first order that needs a push.
Is it better to reward referrals with points or a discount? For the advocate, points, if you run a loyalty program: they cost only the share members redeem, bring the advocate back to spend them and, on Smile, count toward points-based VIP tiers. For the friend, a discount, free shipping or a free product, since a new customer has no account to hold points yet.
How do you calculate the maximum referral reward you can afford? Add the friend's reward to the advocate's real cost (face value times the share redeemed, for points), then keep the total below your paid customer acquisition cost and well below a new customer's first-year gross profit. In our hypothetical $80 example, $15 a side costs about $25 per referred customer against $60 for paid acquisition.
Should a referral reward have a minimum order or a cap? A minimum order near your average order value protects first-order margin, as at Our Place ($100) and Away ($125 in the US). A cap per advocate (five at Away, ten at Dollar Shave Club) limits abuse but also your best advocates; automatic fraud checks do the first job without the second.
What are the best referral program examples in ecommerce? Our review of the 10 best referral programs in ecommerce, read November 2, 2026, covers Death Wish Coffee, CARZILLA, Mpix, Mary Maxim, Live Bearded and ALP Pouches, all on Smile, plus Huel, Charlotte Tilbury, Back Market and Lulus.
