Are discounts running out of road?
Discounts still shift baskets. That part hasn’t changed.
What’s changed is how far a blunt discount can carry a business before it hits a wall of new rules, tired shoppers, and machines that don’t care about your banner ad.
Three forces are converging in 2026.
- Regulators are tightening the rules on how prices and promotions work.
- Shoppers are getting harder to win over with a discount code.
- And AI agents are starting to shop on people’s behalf.
None of them is kind to the “slash the price and hope” approach to eCommerce promotions.
The rules are catching up
Start in the UK, where new regulations repeal the remaining Country of Origin Principle provisions that let EU businesses follow their home country’s rules when selling into the UK.
In plain English: that exemption is gone, so UK consumer law now applies more consistently, whoever you’re buying from. If you run cross-border promotions, your compliance job just got bigger.
The US is moving even faster. More than 35 algorithmic pricing bills were introduced across US states in January and February 2026 alone, on top of New York’s disclosure law and California’s AB 325, both of which target personalised pricing specifically.
The distinction regulators are drawing matters. A public price that moves for everyone based on demand is treated very differently from a price that moves per shopper based on their personal data. The first is manageable; the second is the one attracting fines.
Europe, meanwhile, is building the plumbing for transparency. The Digital Product Passport requires products to carry scannable data tracking their full lifecycle, starting with batteries in 2026, and the Consumer Credit Directive II has turned buy now, pay later into fully regulated credit, closing the loopholes that let short-term interest-free plans dodge affordability checks. Together, they raise the bar for how prices and offers should be displayed at checkout.
None of these bans discounts. They just make the sloppy version expensive.
Deal-seekers still hate a bad deal
Here’s the paradox at the centre of all this: 90% of shoppers worldwide describe themselves as deal-seekers, always hunting for the best price. Discounting isn’t dying because shoppers stopped wanting it.
But 58% of those same deal-seekers will abandon their basket the moment a discount code doesn’t work. That’s not a shopper losing interest. That’s a shopper who was ready to pay, hit a technical failure, and walked away angry instead of paying full price.
Every broken code is a self-inflicted wound, and deal-seekers are the group most likely to notice.
It doesn’t help that most discounting doesn’t work anyway. Nielsen’s research for Marketing Week, led by effectiveness expert Les Binet, has repeatedly found that around 84% of price promotions fail to turn a profit for the brand running them.
Stack a discount on top of a broken checkout, and you’ve paid to lose the sale twice.
Free delivery is doing the heavy lifting
If a broken discount code is what breaks trust, what actually closes the sale?
Free shipping is the single biggest motivator for shoppers to complete a purchase, ahead of every other tactic businesses use to aid conversion. Delivery cost and speed decide more carts than any percentage-off banner.
Cross-border shoppers say much the same when asked why they don’t buy internationally: high delivery costs and unclear charges put them off before a discount ever gets a look in.
The lesson for anyone still treating a discount as the default lever: it’s one tool among several, and often not the sharpest one in the box. Remove friction, a clunky checkout, a hidden delivery fee, and a code that quietly stopped working, and you protect more revenue than by piling a discount on top of a broken experience.
BCG has found personalised offers can generate roughly three times the ROI of mass promotions, which is really the same point from a different angle: precision beats volume.
Shopping for machines, not just people
The newest wrinkle is that some of tomorrow’s customers won’t be human.
AI agents are increasingly researching, negotiating, and buying on behalf of shoppers, yet they don’t respond to brand storytelling. They look for structured data: clear pricing, product specs, shipping policy, and promotion terms, all exposed in a format a machine can read.
If your discount terms only live in a banner image or a marketing email, an agent can’t see them. Retailers who expose their offers as clean, machine-readable data get found by this new channel. Everyone else quietly disappears from it.
That’s not a five-year-away problem. It’s a sort-your-product-feed-out-this-quarter problem.
So what
Put it together, and the shape of the next 18 months is fairly clear: transparent, stable pricing beats aggressive markdowns, fixing broken codes and hidden delivery fees protects revenue, and making offers machine-readable is no longer optional if agentic shopping keeps growing.
- Transparent, stable pricing beats aggressive markdowns that regulators and shoppers are both losing patience with.
- Fixing the boring stuff, broken codes, hidden delivery fees, and clunky checkouts protects more revenue than another 10% off.
- Making offers and pricing data machine-readable isn’t optional if agentic shopping keeps growing the way it’s starting to.
None of this means discounting is dead. Deal-seekers aren’t going anywhere; 90% of shoppers said so themselves. What’s dying is the idea that a blanket discount is a safe default.
The businesses that come out ahead will be the ones that know when to offer a discount, when to hold their nerve, and when to fix the checkout instead.
That’s a harder story to tell in a banner ad. It’s a better one to tell your finance team.
