--- title: "Gift with purchase profit calculator" description: "What a free gift costs per order, after its unit cost, its extra pick and its handling, and how much conversion it has to add to pay for itself." url: https://offersuite.io/calculators/gift-with-purchase-profit updated: 2026-10-13 --- # Gift with purchase profit calculator A free gift doesn't change what the customer pays. It only adds cost: the gift itself, one more item to pick, and whatever wrapping it needs. This works out that cost per order, and how many more buyers the gift has to bring to earn the same per visitor. ## Result The gift costs **$4.45** per order. To earn the same per visitor, it has to bring **40.8% more buyers**. ### Without gift Revenue $40.00 to contribution margin $15.36 (38.4%) Revenue $40.00 Cost of goods −$12.00 Pick and pack −$1.18 Packaging −$0.50 Shipping label −$7.50 Card fee per order −$0.30 Refunds −$2.00 Card processing −$1.16 Contribution margin $15.36 2 declared kinds cost nothing on this option ### With gift Revenue $40.00 to contribution margin $10.91 (27.3%) Revenue $40.00 Cost of goods −$16.00 Pick and pack −$1.18 Extra picks −$0.20 Packaging −$0.50 Shipping label −$7.50 Card fee per order −$0.30 Gift fulfilment −$0.25 Refunds −$2.00 Card processing −$1.16 Contribution margin $10.91 Margin per order, without and with the gift | Per order | Without gift | With gift | | --- | --- | --- | | Revenue | $40.00 | $40.00 | | Cost of goods | −$12.00 | −$16.00 | | Pick and pack | −$1.18 | −$1.18 | | Extra picks | $0.00 | −$0.20 | | Packaging | −$0.50 | −$0.50 | | Shipping label | −$7.50 | −$7.50 | | Card fee per order | −$0.30 | −$0.30 | | Gift fulfilment | $0.00 | −$0.25 | | Refunds | −$2.00 | −$2.00 | | Card processing | −$1.16 | −$1.16 | | Contribution margin | $15.36 | $10.91 | | Margin % | 38.4% | 27.3% | **Profit per visitor without the gift** $0.46 **With the gift, at the same conversion** $0.33 **Conversion lift to break even** +40.8% The gift costs $4.45 an order. Lift to break even +40.8% ## Your numbers **The order** What the customer pays for products $40.00 Product unit cost $12.00 Shipping charged $0.00 Conversion rate without the gift 3.0% **The gift** Gift unit cost $4.00 Gift handling, per gift $0.25 Tissue, a card, a sleeve: anything the gift adds beyond its pick. **Fulfilment and payment** Pick and pack, per order $1.18 Each extra item picked $0.20 Box and packing, per parcel $0.50 Shipping label, per parcel $7.50 Card processing rate 2.9% Card fee per order $0.30 Refund reserve 5% The share of revenue you expect to refund. [Reset to the example](https://offersuite.io/calculators/gift-with-purchase-profit) ## How it's calculated - Margin per order = what the customer pays + shipping charged − product costs − pick and pack − extra picks − packaging − label − card fees − refund reserve - Gift cost per order = gift unit cost + one extra pick + gift handling. Revenue does not change - Lift to break even = margin without the gift ÷ margin with the gift − 1 - Profit per visitor = margin per order × conversion rate Every figure on this page comes from Offer Suite's own margin engine, the same code the product uses to forecast each offer's and option's profit and to compute realized margin on orders. Money is computed in whole cents. ## Worked example A coffee brand sells a bag at $40.00 with free shipping. The bag costs $12.00; the warehouse charges $1.18 to pick and pack the order, the box is $0.50 and the label $7.50. Card fees come to $1.16 plus $0.30, and $2.00 is set aside for refunds. The order keeps **$15.36**, 38.4% of what the customer paid. Now add a mug as a gift. It costs $4.00, one more pick is $0.20, and wrapping it is $0.25. The customer still pays $40.00, so the order now keeps **$10.91**. At 3.0% conversion, the page earned $0.46 per visitor before the gift and $0.33 with it. To get back to $0.46, the gift has to bring 40.8% more buyers. A gift that lifts conversion by 10% on this order loses money. ## Assumptions - Every order gets the gift. A gift above a spend threshold is a threshold question as well; the free-shipping threshold calculator shows how to count orders that already qualify. - The gift ships in the same parcel, so it adds a pick but no second label or box. - Card fees and the refund reserve are a share of what the customer pays, so a gift doesn't move them. - Pick and pack $1.18 per order and $0.20 for each extra item are the defaults of the engine's DTC-US profile, a typical third-party warehouse contract. Use your own contract. - The shipping label ($7.50) is an assumption for a domestic ground parcel of about a pound. Your carrier account or shipping app has your rate. - Card processing of 2.9% + $0.30 is Shopify Payments' online rate for a standard card on the Basic plan in the United States. The Shopify Payments fees pages list every plan and country; enter yours. - The refund reserve (5%) is a share of revenue set aside for refunds. Cost is not reduced by a refund, because the goods were already picked and shipped. ## Questions ### How do I calculate the cost of a free gift with purchase? Add the gift's unit cost, the fee your warehouse charges for picking one more item, and any handling such as tissue or a card. That sum comes straight off the order's margin, because the customer pays the same with or without the gift. ### How much does a gift with purchase need to lift conversion? Divide the order's margin without the gift by its margin with the gift, and subtract one. With the defaults on this page, a $4.00 mug on a $40.00 order needs roughly 40% more buyers to earn the same profit per visitor, because the order's margin is small once shipping and fees are paid. ### Why does the gift's retail value not matter? Profit only sees what you pay for the gift and what the customer pays you. A mug that retails at $18.00 and costs you $4.00 costs $4.00, plus its pick and handling. The retail value can change how attractive the offer looks, which is the conversion side of this calculation. ### Should the gift go on subscription renewals too? Usually not. A gift on the first order only is a one-time acquisition cost. On every renewal it lowers the margin of every order the subscriber ever places. The subscription calculator shows the first-order and renewal margins side by side. ## Embed this calculator Paste this where you want the calculator. It opens on the numbers above, recalculates as your readers change them, and links back to this page. **Show the embed code** ``` ``` ## See what your own offers earn. Offer Suite opens to Shopify brands a few at a time. Join the waitlist, or ask for a free profit audit of your past orders: realized profit per item and per offer option, what each costs you, and where margin leaks. [Join the waitlist](https://offersuite.io/waitlist) [Request a free profit audit](https://offersuite.io/profit-audit) ## Related - [Calculators **Profit calculators for Shopify offers** Calculators for contribution margin per order, break-even discounts, average order value, shipping by weight and zone, card fees, Amazon and TikTok Shop fees, break-even ROAS and CPA, upsell funnels, gifts, subscriptions, bundles and free-shipping thresholds, each run on Offer Suite's margin engine.](https://offersuite.io/calculators) - [Feature **Forecast and realized profit per offer option** Forecast and realized profit per offer, option, version, item and traffic source from one margin engine in whole cents, with ad spend, realized CAC and subscription LTV.](https://offersuite.io/features/profit) - [Calculator **Subscription first order vs renewal calculator** Margin on a subscription's first order and on each renewal, and the expected profit per subscriber over time at your retention, against a one-time buyer.](https://offersuite.io/calculators/subscription-first-order-vs-renewal) - [Calculator **Free shipping threshold calculator** Price a free-shipping threshold with the shipping you give away on orders that already reach it, and the share of smaller orders that must top up to pay for it.](https://offersuite.io/calculators/free-shipping-threshold) - [Calculator **Offer option calculator: profit per visitor** Compare up to three offer options on profit per visitor, margin per order times conversion, and see the conversion lift each one needs to match the best.](https://offersuite.io/calculators/offer-option-profit-per-visitor) - [Glossary **Contribution margin: definition and formula** What an order keeps after every cost that grows with it: product cost, fulfilment, shipping, card fees and refunds. The number an offer should be judged on.](https://offersuite.io/glossary/contribution-margin)