BOGO meaning: what buy one, get one deals are and what they cost you

1 What BOGO stands for, and its four common forms

BOGO is short for "buy one, get one". British English also uses BOGOF, "buy one, get one free".

The second item isn't always free. Dictionary.com defines BOGO as an offer to buy an item and receive a second item at a discount. These are the common forms, with the discount spread across every item the customer takes home:

2 Work out what you keep per order

What counts for you isn't the discount but the gross profit: what's left after your product cost. The table below uses a $20.00 price and an $8.00 cost per item.

The rule of thumb: a free item only covers its own cost if your cost is below half the price, so your margin is above 50%. Shipping and payment fees come on top. If the customer would have bought one item anyway, you keep $4.00 instead of $12.00 in this example. With buy one, get one 50% off, you keep $14.00, more than on a single sale.

How many more units you need to sell to make up for a discount is in Is a volume discount worth it?

3 How to set up a BOGO deal in Shopify

Shopify has a built-in buy X get Y discount, as an automatic discount or as a code. Under what the customer buys, you set a minimum quantity or a minimum purchase amount. Under what the customer gets, you set the quantity and the value: free, a percentage or an amount off each. These points decide whether the deal runs the way you expect:

• The customer has to add every item to the cart, the free one included. According to Shopify's Help Center, it's never added automatically. Say so on the product page.
• If the same product or collection is on both sides, an automatic discount goes to the lower-priced item.
• Without a limit, the deal applies as often as it fits into one order. If you want one free item per order, set the maximum number of uses per order to 1.
• At most 25 automatic discounts can be active at once, and app discounts count toward that.

4 Plan for customers who want just one

BOGO only rewards customers who take two. Someone who wants one item gets nothing out of it. For products people rarely need twice, buy one, get one 50% off often fits better: on two items it costs you 25% instead of 50%.

Another option is a volume discount. It lowers the price of every unit from a set quantity. At exactly two items, 25% off 2 or more costs the same as buy one, get one 50% off. At three items, the tier gives more, because it also discounts the third one. Why "free" often pulls harder than a percentage anyway is covered in Free gift or discount?

5 Sort out stock and returns before launch

With buy one, get one free, every order takes twice as many units out of stock. Shopify explicitly advises adequate inventory when you offer free products. Check the shipping weight too if parcels get heavier.

Returns are harder. With buy X get Y, the free item shows at 0 in the order and the paid item at its price, and Shopify refunds each line at its price after discounts. If a customer sends back only the paid item, they'd get its full price back and keep the free one. You can edit the refund amount by hand in Shopify.

So write down in your offer terms what happens with a partial return, for example that the free item has to come back too.

6 In the US, follow the FTC's guide on "free"

The FTC's guide on the word free (16 CFR 251) sets three points for BOGO deals. The regular price is the one you've openly sold at for about 30 days, and you may not mark it up to cover the free item. All conditions belong clearly at the start of the offer, and a footnote behind an asterisk isn't enough. And a free offer for the same product should run at most 6 months in any 12 months, with at least 30 days between offers and no more than three per year in one area.

Selling to Germany? There, an offer where one item is free only together with another is generally allowed if it's transparent: what the customer gets and under what condition. This isn't legal advice.