To set up discounts and promo codes in your POS, create each offer as a named discount (percentage or dollar amount), choose which items or order types it applies to, set start and end dates, restrict who can apply it, and test it on a sample ticket before you announce it. Naming every discount clearly is what lets you measure whether a promotion made money.
Holiday promotions are about to start, so set these up before the rush rather than during it.
Pick the discount types you need
Most restaurants need only four types.
| Discount type | Example | Best use |
|---|---|---|
| Percentage off check | 10% off total | Loyalty rewards, staff |
| Dollar off check | $5 off $30 | Online promo codes |
| Item discount | $2 off appetizers | Happy hour, slow items |
| Comp (100% off) | Full item removed | Service recovery |
Keep comps separate from discounts so reports stay clean. For more on controlling them, see How to Track Voids, Comps and Discounts in Your POS.
Step-by-step setup
- Name it clearly. Use "HAPPYHR-APPS" instead of "Discount 3." Reports are only useful if names make sense.
- Set the value. Enter the percentage or dollar amount, and any minimum spend.
- Limit the scope. Apply to specific menu categories, order types (dine-in, takeout, online) or hours.
- Set dates. Give limited-time offers an end date so they do not live forever. See How to Run a Limited-Time Offer at Your Restaurant.
- Assign permissions. Staff can apply small preset discounts; only managers can enter open amounts. Permissions are covered in How to Set Up Employee Permissions in Your POS.
- Require a reason code for manual discounts.
- Test with a dummy ticket in each order type and confirm tax is calculated correctly. Tax behavior is explained in How to Set Up Taxes and Service Charges in Your POS.
Promo codes for online ordering
A promo code is a discount that a guest types in at checkout. Use unique codes per channel, such as one for email and one for Instagram, so you can see which marketing actually works. Limit each code to one use per customer or a set total, and set a minimum order to protect margin. Pair codes with How to Get Customers to Order Direct Instead of Delivery Apps to shift orders away from commissions.
Do the math before you launch
A 20% discount does not cost you 20% of sales. It costs 20% of price, which can wipe out most of an item's profit. If a dish sells for $20 with a $6 food cost, you keep $14 before labor. At 20% off you keep $10, so you need roughly 40% more sales of that dish just to earn the same profit. The free worksheet below calculates this break-even for any offer. Review margin by item with Calculating Contribution Margin Per Menu Item.
Takeaway: Every discount needs a name, a limit, an end date and a break-even number. If you cannot say how many extra sales it takes to pay off, do not run it.
Prevent discount abuse
Watch for employees giving unauthorized discounts, stacked offers, and codes shared outside your intended audience. Run a weekly discount report by employee and by code. Sudden spikes are worth a conversation. Broader safeguards are in How to Prevent POS Fraud and Errors.
Measure results
After each promotion, compare average check, number of covers and total profit against a normal week. Use How to Use Sales Data from Your POS to pull the numbers. If the offer lifted traffic but cut profit, adjust it or retire it.
Let your POS make this easy
Cobblestone POS is a free, all-in-one POS for independent restaurants. It supports discounts, commission-free online ordering with promo codes, loyalty and reporting, and its AI assistant Daisy helps you see which promotions worked. There is no monthly fee, compared with roughly $470+ per month for Toast.
Free Discount Break-Even Calculator (Excel).