Food delivery marketplaces are intensely competitive environments. On third-party apps, dozens of restaurants compete side by side, often offering similar cuisines, price points, and delivery times.
Which promos work? It’s the perpetual question of retailers, especially on third-party apps and sites where competition is fierce. Promos are big business – according to June 2024 data by SimplyCodes, 62% of US consumers search for and use promo codes, discounts, or coupons when making online purchases – and they can be costly if brands get it wrong. McKinsey has previously reported that 59% of consumer-packaged-goods companies lose money on promotions.
In crowded digital shelves, promotions don’t just influence spend — they influence choice. They act as decision shortcuts, helping customers narrow options when faced with multiple similar restaurants.
We also know that promos can make or break conversion, especially for customers deciding between multiple options. Our data on food-delivery orders in the US shows that the more restaurants a customer views, the more likely they are to use a promo – perhaps suggesting a promotion can act as an indecision aid when faced with choice overload.
Scrolling is the default behavior on delivery platforms. Consumers browse, compare menus, check delivery times, read ratings, and weigh price against perceived value. As the number of viewed restaurants increases, so does cognitive fatigue.
Decision fatigue sets in when too many similar options compete for attention. At that point, promotions reduce mental effort. They simplify the trade-off: “This one gives me something extra.”
An investigation into what makes a good food-delivery promo reveals some interesting patterns rooted in consumer psychology. Most restaurants rely heavily on Percentage Off Discounts (deals like “20% off, up to $25”), but our analysis shows they underperform despite their frequent use.
Behavioral science calls this the “zero price effect”: consumers disproportionately value items labeled as free, even when the monetary value is equivalent to a discount.
Conversely, Free Item promos (e.g. “Free item on orders $15+”) result in the highest conversion, and Fixed Amount Discounts (e.g. “Save $5 on $20+”) generate the highest median spend.
These more successful promos share a few key traits:
Cognitive ease: Specific amounts and items are easy to understand and tangible for customers – I know immediately what $5 or a free Coke is, but 20% off requires some (however basic) mental arithmetic.
Savvy upselling: The successful promos typically include a minimum spend, nudging customers to spend a little extra to reach the threshold. Percentage Off Discounts often take the exact opposite approach – they have a spending cap above which they can’t be used.
The power of “free”: Behavioural science has demonstrated that consumers tend to overvalue things labelled as “free” – even if, say, direct comparison with a Percentage Off offer may warrant a better deal.
“Free” requires no calculation. It feels immediate and tangible. In contrast, “20% off” introduces a small cognitive pause: What does that equal? Is it capped? Is it worth it?
Less thinking often translates to faster decisions — and faster decisions increase completion rates.
Delivery fees and service fees create friction at checkout. When a promotion removes or offsets a fee, it removes a psychological barrier. Free delivery, in particular, reduces resistance at the final step — increasing order completion even if basket size remains similar.
Why don’t we see the same patterns with Buy 1 Get 1 Free offers? In theory, this type of promo ticks all these behavioural boxes. Perhaps the more modest performance shows us that food consumers value variety over quantity — I want a free side of guacamole, not a second burrito.
Not all “free” offers perform the same way. Variety-driven freebies such as sides, drinks, or add-ons tend to outperform duplication-based offers because they add to the experience instead of simply increasing portion size.
Free item promos deliver the highest conversion rates. Fixed dollar discounts are associated with higher median spend. Percentage-off discounts show lower impact despite being used most frequently.
Promotions such as “Free item on $15+” subtly encourage cart expansion. The customer is already close — adding one more item feels easy.
We can see all this play out in the approaches of some familiar QSRs on food-delivery apps. While all brands experiment with a variety of promo messages, those that lean more heavily into Free Item and Fixed-Amount Discounts tend to see greater uplifts in median order values. Subway, McDonald’s, Taco Bell, and Chipotle Mexican Grill, for example, all use these types of promos extensively (over 40% of their promotions). When comparing their overall promo performance, most of these brands see at least a 7% increase in order value when customers use promos. For example, McDonald’s customers typically spend $21 without promos but $23.60 with them – roughly a 12% uptick. (Starbucks is one notable exception to this pattern, perhaps due to different customer ordering patterns at coffee chains). Brands that rely more on other types of promos don’t see this same order-value boost.
Minimum thresholds guide spending upward without feeling pushy. The customer feels in control, even though the structure encourages a higher basket.
Promo sensitivity is not uniform across demographics. Younger consumers, particularly Gen Z and Millennials, often show strong preference for free delivery and visible value-adds. Older consumers may respond more predictably to direct monetary savings.
However, the appeal of “free” cuts across age groups because it simplifies value perception and reduces friction.
Threshold-driven promotions often produce 15–20% higher spend when customers stretch to unlock the offer. Brands that rely more on other types of promos don’t see this same order-value boost.
When friction is reduced consistently (e.g., through free delivery or predictable value-adds), customers are more likely to reorder. Reduced checkout resistance can translate into habitual behavior, especially in high-frequency categories like food delivery.
Over time, repeated exposure to frictionless promos can create comfort and familiarity with a brand. While percentage discounts can drive volume, value-added “free” mechanics may shape longer-term perception and preference.
That’s not to say there’s no value in the blanket Percentage Off and BOGOF strategies: despite their lower individual order values and conversion, the sheer volume of these promotions have the potential to result in substantial revenue en masse, even if they don’t tick the same behavioural-psychology boxes.
So, it’s really a tale of two strategies: volume vs. precision. What’s your approach, and do you have the data you need to get the most out of your promos?
The real strategic question isn’t whether to promote — it’s which mechanic aligns with your objective: drive conversion, increase basket size, or scale volume.
So, it’s really a tale of two strategies: volume vs. precision. What’s your approach, and do you have the data you need to get the most out of your promos?
Data and insights for this article were contributed by Kate Jacobs, Insight Analyst at RealityMine. Source: May-July 2025. MFour data.
