Margin leakage
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In short
Margin lost to discounts, commission and fees on orders that didn't need them: small on each order, large across a year.
What it means
Margin leakage is the gap between the margin an order should have made and what it made after discounts, commission and fees that didn't change the shopper's decision. In ecommerce the usual sources are codes used by shoppers they weren't meant for, discounts that stack further than planned, and commission paid on sales a partner didn't start.
On your store
A full-price shopper's extension applies an old code and claims the affiliate click. On that one order you give away the discount and pay commission on what's left, for a sale you had already made.
Why it matters
Each case is small enough to miss in a weekly report. In Ethercycle's 2026 study of 10 client stores, one evergreen code left live all year gave back $349K.[Ethercycle, Jul 2026] (opens the source) When a partner earns commission on an order that already carries the code it published, you fund both. One DTC founder told Modern Retail it was 'a double whammy hit on margins'.[Modern Retail, May 2024] (opens the source)
What Benson does
Benson measures conversion rate, order value and discount depth in coupon-extension sessions, next to the rest of your traffic.
Sources
- 1Ethercycle, “State of Discounts 2026”, Jul 2026. ethercycle.com (opens the source)
- 2Modern Retail, “How promo code leaks are impacting DTC brands' profit margins”, May 2024. modernretail.co (opens the source)
Read next
Related terms
- Discount code leakWhen a discount code reaches shoppers it wasn't meant for, through voucher sites, coupon extensions or sharing, and lands on orders it wasn't priced for.
- Discount depthHow much of an order's price a discount takes off, as a share of the basket. It decides how many extra sales a promotion needs to pay for itself.
- Discount stackingMore than one discount on the same order, such as an automatic sale plus a code, so the combined reduction is deeper than either one alone.
- Affiliate hijackingWhen an extension or publisher adds its own affiliate click late in a visit another partner referred, so the commission moves to it.
