---
title: "Welcome gift: definition, formula and example"
description: "A gift or insert that ships only with a subscriber's first order. A cost of winning the subscriber, which renewals do not carry."
url: https://offersuite.io/glossary/welcome-gift
updated: 2026-10-13
---

# Welcome gift

A gift or insert that ships only with a subscriber's first order. A cost of winning the subscriber, which renewals do not carry.

## In plain words

A welcome gift is something extra in a subscriber's first box: a mug, a scoop, a printed guide, a sample. It is there to make starting feel worthwhile, and it does not come again.

Because it ships once, it belongs to the first order's costs and to no other. Charge it on every order and renewals look worse than they are. Leave it out and the first order looks better than it is. Both mistakes distort the one comparison a subscription depends on.

## Formula

- First-order margin = first-order price − recurring costs − first-order-only costs
- Renewal margin = renewal price − recurring costs

## Worked example

The coffee subscription's first box holds the bag, a $4.00 mug and a printed insert that costs $0.85. The engine charges the mug and the insert on the first order only, which keeps $2.94 of its $32.00.

Each renewal ships the bag alone. The engine charges $0.00 for the insert there, and the renewal keeps $11.68.

### 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 welcome gift is not a gift with purchase

A gift with purchase is repaid by the one order it ships with. A welcome gift is repaid over the renewals that follow. That lets it be more generous, and it also means it is wasted on every subscriber who cancels before the second order.

## Using it

Add the welcome gift to the first order's loss, and ask how many renewals it takes to earn back. Then look at the first renewal's rate with and without the gift. A gift that wins subscribers who leave after one box has raised your acquisition cost without raising what you earn.

## In Offer Suite

In Offer Suite a line that does not recur ships on the first order only, and a cost kind can be scoped to first orders. A renewal is costed without either.

Source: Offer Suite's margin engine.

## 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 **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 **Subscription intro offer calculator** Subscribe and save, a discount on the first order, a free trial or a free product: each as a cohort of subscribers with the same costs, ranked on profit per visitor after acquisition.](https://offersuite.io/calculators/subscription-intro-offer)
- [Glossary **Renewal order: definition, formula and example** A subscription order the subscriber didn't place by hand, billed by the subscription contract. Priced at the renewal price, without first-order-only costs.](https://offersuite.io/glossary/renewal-order)
- [Glossary **First-order loss: definition, formula and example** What a customer still owes after their first order: acquisition cost minus the first order's margin. The sum that later orders must earn back.](https://offersuite.io/glossary/first-order-loss)
- [Glossary **Gift with purchase: definition, formula and example** A free item added to an order to win the sale. It leaves the price alone and adds a unit cost, a pick and sometimes a heavier parcel.](https://offersuite.io/glossary/gift-with-purchase)