# Discount Code

> A discount code is a promotional tool that reduces the price of a product or service by a fixed amount or a percentage.

- **URL**: https://dodopayments.com/glossary/discount-code

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## What is Discount Code?

A discount code is a promotional tool that reduces the price of a product or service by a fixed amount or a percentage. It is applied at the point of sale to lower the total cost for the customer.

### Why It Matters

- It helps in clearing inventory or boosting sales during slow periods.

- It creates a sense of urgency and encourages customers to complete their purchase.

- It allows for flexible pricing strategies without changing the base price of the product.

- It is an effective way to track the performance of affiliate and influencer marketing partnerships.

## Learn More

- [Pricing psychology tactics that improve conversion](https://dodopayments.com/blogs/pricing-psychology)
- [How to use value-based pricing in SaaS](https://dodopayments.com/blogs/value-based-pricing-saas)
- [Top pricing mistakes founders should avoid](https://dodopayments.com/blogs/top-pricing-mistakes-founders-make)