---
title: "Threshold top-up: definition, formula and example"
description: "A customer adding to their cart to reach a free-shipping or gift threshold. What it gains depends on how far below the threshold they started."
url: https://offersuite.io/glossary/threshold-top-up
updated: 2026-10-13
---

# Threshold top-up

A customer adding to their cart to reach a free-shipping or gift threshold. What it gains depends on how far below the threshold they started.

## In plain words

A threshold top-up is the extra a customer adds to reach a threshold: free shipping above $75, a gift above $100. It is the whole purpose of a threshold. Orders that were already above it take the reward and add nothing.

A top-up is not automatically a gain. The customer adds some products, on which you keep a margin, and stops paying for shipping. If they were only a few dollars short, the margin on what they added is smaller than the shipping they no longer pay, and the top-up loses money.

## Formula

- Gain per top-up = (threshold − order value) × product margin rate − shipping no longer charged

## Worked example

With a $75.00 threshold, $7.00 shipping and a 55% margin on added products, an order of $45.00 that tops up gains $9.50. One that started at $55.00 gains $4.00.

An order of $70.00 that adds $5.00 to qualify comes out at −$4.25: it gives up more in shipping than the extra products earn. Across the example's orders, 2.4% of those below the threshold have to top up for it to pay.

### The example order

A $40.00 bag of coffee, shipped free, every cost counted

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

Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.

## A higher average order is not proof that customers topped up

A threshold can raise average order value simply by being launched in a strong month, or by drawing a different customer. To know whether customers topped up, compare the orders just below and just above the threshold before and after. That is where the movement shows.

## Using it

Set the threshold far enough above your common order values that the top-up is worth having, and near enough that it feels reachable. Then give customers something sensible to add: a product priced close to the usual gap. A threshold with nothing suitable to add mostly rewards the orders already over it.

## Related

- [Glossary **Glossary of offer economics** The terms behind offer profit, defined plainly with their formulas and a worked number: contribution margin, profit per visitor, break-even lift and more.](https://offersuite.io/glossary)
- [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)
- [Glossary **Free-shipping threshold: definition and formula** The order value above which shipping is free. It costs the shipping revenue of every order already above it, and pays only if enough smaller orders top up.](https://offersuite.io/glossary/free-shipping-threshold)
- [Glossary **Average order value (AOV): definition and formula** Total order revenue divided by the number of orders. Useful for spotting a trend, misleading for setting thresholds because it hides the shape of your orders.](https://offersuite.io/glossary/average-order-value)
- [Glossary **Free shipping: definition, formula and example** Charging the customer nothing for delivery. The carrier still gets paid, so it is a revenue decision that costs what shipping used to bring in.](https://offersuite.io/glossary/free-shipping)
- [Glossary **Shipping revenue: definition, formula and example** What the customer pays for delivery, after any shipping discount and before tax. It is revenue of the order, separate from what the label costs.](https://offersuite.io/glossary/shipping-revenue)