How to Set Up a Referral Program on Shopify

Who it is for

Stores with word of mouth

Time needed

Half a day to set up

What you need

Reward rules and a referral app

Customers trust a friend's recommendation more than any ad, and a referral program turns that into something you can track and reward. The catch is that it only works for products people already talk about. If nobody mentions your store to friends today, a reward won't change that much. Fix the product, delivery and reviews first.

A quick note on the search term: "Shopify referral program" also brings up Shopify's own program for people who refer merchants to Shopify. This guide is about the other kind: a refer-a-friend program in your own store. I'll cover how it works, how to set the rewards, the apps, setup, fraud, the legal points and how to measure it. App prices come from the Shopify App Store, and the rules from the ICO and the FTC, as checked on 7 November 2026.

How a referral program works on Shopify

Every referral app follows the same pattern:

1. The customer gets a link. After an order, or from their account, each customer receives a personal referral link or code.
2. They share it. By text, social media, email or in person. The app tracks clicks and orders from that link.
3. The friend gets a reward. Usually a discount on their first order, applied at checkout.
4. The referrer gets a reward. Once the friend's order meets your rules, the referrer receives a discount, store credit, points or cash.

Shopify itself provides the discounts, customer accounts and store credit the app relies on, but not the tracking. That is why you need an app.

Choosing the rewards

A double-sided reward, where both people get something, gives the friend a reason to use the link and the referrer a reason to share it. The reward type changes the cost and the appeal:

Price the reward against what a new customer is worth to you, not against what other stores offer. A worked example for a store with a $60 average first order:

Store credit for the referrer is often the best value, because they have to come back to use it. Shopify store credit only works for customers signed in through the new customer accounts, so check your app supports it.

Shopify referral program apps compared

Referrals come either as part of a loyalty app or from a dedicated referral app. These are the ones I see most:

ReferralCandy's success fee falls as the plan rises: 10.5% on Basic at $39 a month, 3.5% on Grow at $79, 1.5% on Scale at $249 and 0.25% on Enterprise at $799. Its plans include fraud protection and connect to Klaviyo, Omnisend and the main subscription apps, with a 7-day free trial. Rivo's Scale plan includes 400 orders, then charges $20 per 100 more, capped at $499 a month.

If you already run a loyalty program, add referrals inside it rather than installing a second app. One widget and one balance are easier for customers, and one less app keeps your store faster. For the loyalty side, see my guide to setting up a Shopify loyalty program.

Setting it up, step by step

1. Write the rules first. Who can refer (customers only, or anyone), the friend's reward, the referrer's reward, minimum order, and when rewards are released.
2. Turn on the new customer accounts. Under Settings > Customer accounts, so customers can see their link and rewards and use store credit.
3. Install the app. Start on the free plan or trial. Approve its permissions.
4. Create the rewards. Set the friend's discount as a single-use code for new customers only. Set the referrer's reward to release after the friend's order is fulfilled and past your returns window.
5. Brand the widget and page. Enable the app embed in Online Store > Themes > Customize, and publish a short "Refer a friend" page with the rules.
6. Connect your email tool. Sync referral events to Klaviyo or your email app so you can send "share your link" and "you earned a reward" emails.
7. Test the full loop. Refer yourself from a second email and device, place the friend's order, refund it, and check the referrer reward behaves as your rules say.

Where to show the referral offer

Customers share when they are happiest with you, which is usually just after delivery, not at checkout. The places I add it:

• Post-purchase email. A few days after delivery, with the link ready to share. This is usually the biggest source.
• Order status page. A short block with the offer.
• Account page. The link and reward balance, always available.
• Packaging insert. A card with a short URL or QR code.
• Footer link. To the "Refer a friend" page.

Stopping referral abuse

Any reward attracts people trying to game it. The common trick is self-referral: ordering with a second email to claim both rewards. Protect the program with a few rules:

• Delay the referrer's reward until the friend's order is fulfilled and past the returns window.
• New customers only for the friend's discount, limited to one use.
• A minimum order value, so the reward isn't larger than the margin on a tiny order.
• Turn on the app's fraud checks, and look at which signals it uses, such as matching addresses or devices. ReferralCandy lists fraud protection, and BON's free plan includes anti-cheat referrals.
• Review flagged referrals each week before rewards release.

Legal points to get right

This is general information, not legal advice. Two official sources matter most for referral programs:

• UK, ICO. If you encourage customers to forward your marketing to friends, you are treated as "instigating" that message and PECR applies. The ICO also advises against asking customers for friends' contact details for marketing. Let customers share their own link, and don't email the friend until they sign up themselves.
• US, FTC. The FTC's endorsement guidance says people who earn a reward for promoting a product, including through discount codes or commission links, should clearly disclose that connection. Remind referrers to say they get a reward when they post their link publicly.

Publish the program terms on your referral page: who qualifies, what the rewards are, when they release and that you can cancel rewards earned through abuse.

How to measure it

Track four numbers each month: referral orders, total reward cost, cost per referred customer and the share of new customers who came through referrals. Then compare referred customers' second-order rate with everyone else's, using Shopify's customer reports under Analytics > Reports or a segment of customers tagged by the app. If referred customers come back more often, the program is worth a more generous reward.

Common mistakes

1. Launching before people talk about you. A referral program amplifies word of mouth. It doesn't create it.
2. Releasing rewards at checkout. Self-referrers claim and refund.
3. Hiding the program. No post-purchase email means almost nobody shares.
4. Friend-email forms. Collecting friends' addresses creates consent problems in the UK and EU.
5. Rewards bigger than the margin. Price from your numbers, with a minimum order.
6. Two apps for loyalty and referrals. More code, more fees, two balances.

Referral program checklist

• Rules written: rewards, minimum order, release timing, eligibility.
• Reward cost checked against a new customer's value.
• New customer accounts on and the app installed.
• Friend's code single-use and limited to new customers.
• Referrer reward delayed past the returns window.
• Widget, referral page and terms published.
• Post-purchase share email live.
• Full loop tested, including a refund.
• Monthly review of cost per referred customer and repeat rate.

Next steps

Write the rules and model the reward cost this week, then launch on a free plan with one post-purchase share email. If your app doesn't do what you need, for example custom reward logic tied to your products, my custom Shopify app development starts from $800, with a fixed quote.

Frequently asked questions

Sources

1. Referral Candy & Affiliate, Shopify App Store
2. Smile: Loyalty Program Rewards, Shopify App Store
3. BON Loyalty Program & Rewards, Shopify App Store
4. Rivo: Loyalty Program, Rewards, Shopify App Store
5. Electronic mail marketing (Guide to PECR), Information Commissioner's Office
6. FTC's Endorsement Guides: What People Are Asking, Federal Trade Commission

Related services and work

Written by Ashraf Siddik

I'm a Shopify developer and CRO specialist. I have built and improved Shopify stores since 2018, completed more than 1,000 projects, and hold a 4.96 average rating across 719 client reviews.

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