Referral Program Best Practices, With 16 Real Offers Compared (2027)

A referral program pays your customers to bring in new ones, and it only works if the reward, the timing and the safeguards are right. I've worked with hundreds of Shopify merchants on their loyalty programs, referrals included, over the past three years, and for this guide we read the referral offers of 16 real brands, from ThirdLove to Dr. Squatch, to see what they actually give away and what rules they attach.

This guide is written by Kris, co-founder of Mage. Mage is a loyalty and customer accounts platform for Shopify, and referrals are part of it, so I've been specific about how ours works.

The short version

• Reward both sides: the advocate and the friend each need a reason to act.
• Work out the reward from your margins and average order value, so it is something you can afford and both sides notice.
• Use a discount code as the reward. It is the easiest for customers to understand and has the least friction.
• Turn on every fraud setting, and hold the advocate's reward until the friend's order is safe.
• Show the offer where customers are already looking: the post-purchase page, emails, the customer account and your loyalty landing page.

How we researched this guide

Our brand breakdowns cover 49 loyalty programs. For each one we read the brand's program pages and terms in October 2026, and 16 of them publish a referral offer. The table below records what each one says. Programs change, so check a brand's current page before copying anything. The advice comes from my own experience working with merchants.

What 16 real referral programs offer

Read the full breakdown for each brand: ThirdLove, Our Place, Starface, INKEY List, Moroccanoil, Oh Polly, Kylie Cosmetics, Club OUAI, Dr. Squatch, Death Wish Coffee, GHOST, OSEA, Grüns, Lola Blankets, The North Face, Princess Polly.

Most reward both sides

11 of the 16 publish an offer that rewards both the friend and the advocate: ThirdLove, Our Place, Starface, INKEY List, Moroccanoil, Oh Polly, Kylie Cosmetics, Club OUAI, Dr. Squatch, Death Wish Coffee and GHOST. The other five publish less: OSEA shows only the advocate's reward, Grüns doesn't give the friend's amount, and Lola Blankets, The North Face and Princess Polly don't publish the friend's side on the page.

Refer a Friend on the Kylie Cosmetics Rewards page, captured 23 October 2026. From our Kylie Cosmetics breakdown.

Most set a minimum first order

8 of the 16 attach a minimum first order to the friend's reward, from $25 at Dr. Squatch to $100 at Our Place and Oh Polly. Measured against that minimum, the friend's reward runs from 10% at Oh Polly to 40% at Dr. Squatch (our arithmetic on each brand's published minimum).

The Refer a Friend card on Starface's rewards page, captured 23 October 2026. From our Starface breakdown.

Advocates are usually paid in points

10 of the 16 pay the advocate in points, and the rest pay a dollar amount or a percentage off. One waits: Oh Polly's points arrive 30 days after the friend's order.

Few publish their anti-abuse rules

Five brands publish a rule against abuse: ThirdLove (second-email self-referrals), Starface (the same email), INKEY List (the same IP), Club OUAI (similar emails or a shared address) and Grüns (no commissions on paid ads).

Referral program best practices

Reward both sides

Both parties need an incentive. The friend needs a reason to act on a link instead of ignoring it, and the advocate needs a reason to share more than once. Of the 16 programs, 11 do this clearly. OSEA is the exception that proves it: its page shows the advocate's reward and no friend reward at all. GHOST rewards both, but its breakdown shows the friend getting 20% off a first order (about $11 on a $54.99 tub) while the member gets 500 points, worth about $2 to $2.50 of product. I would want both sides to feel the reward.

Work out the reward from your margins and AOV

Look at your margins and your average order value, and work out what you can realistically afford to give away for each referred customer. Then make the reward large enough that both sides notice it. A reward is part of your acquisition cost, so do the sum before you launch. The 16 programs show how wide the range is: the friend gets $10 on a first order of $40 at Starface, $20 on $100 at Our Place and $25 on $75 at ThirdLove.

Use a discount code for the reward

I recommend a discount code, because it is the easiest for customers to understand and has the least friction. The friend sees the amount at checkout, and the advocate sees it as a code they can use. Most of the programs (10 of 16) pay the advocate in points, which adds a step: the member has to learn what a point is worth before the reward means anything. That is my reasoning, not a measurement. In Mage the basic referral reward is a dollar discount code, and you choose which products it applies to, whether it can combine with other discounts, a minimum spend and how many days the code lasts.

Set a minimum first order

How high depends on your margins, but I generally recommend a minimum first order for the friend. It protects you from giving the reward away on a tiny order, and half of the programs in our research do it, with minimums from $25 to $100. Mage's help center suggests setting the minimum slightly above your average order value, so the friend adds one more item to qualify.

Turn on every fraud setting

Referral rewards are valuable, so customers will try to game them. I tell every merchant to turn on all the fraud settings. In Mage they are:

• Block email aliases: stops claims that use email variations such as + aliases, so john+test@gmail.com is treated as john@gmail.com.
• Block self-referrals: stops advocates referring themselves with a second email address or under their own name, and a self-referral spotted after the order is rejected automatically. This is on by default.
• Block advocate self-claims: stops advocates claiming their own referral link from the same browser or device.
• Block same IP: limits claims from the same IP address within a time window. You set the maximum claims per IP and the number of days, and the defaults are 5 claims and 7 days.
• Block same device: blocks any device that has already claimed a referral on your store, which catches one person creating several emails to claim repeatedly from the same browser.

Blocked attempts are logged with the reason, for example self-referral, existing customer, same IP or same device. The brands in our table show the same patterns: INKEY List blocks the same IP, Starface wants the same email that received the code, and Club OUAI blocks similar emails and shared addresses.

Mage's referral fraud prevention settings with every option switched on, November 2026.

Hold the advocate's reward until the order is safe

A referral that converts can still be cancelled or returned. In Mage the advocate's reward is held for 14 days after the friend pays by default. You can change that in the Referrals settings: set it to 0 and the reward is released once the friend's order is fully fulfilled, or choose to send it the moment the friend pays. If the friend's order is later cancelled or refunded, an unused reward is withdrawn, and one that has already been used is never clawed back. Oh Polly's 30 day wait in our table shows the same idea.

Show the offer where customers are already looking

Put the referral offer in four places: the post-purchase page, your emails, the customer account and your loyalty landing page. In Mage the referral code block sits in the Rewards Widget and the Account Sidebar, so a customer can copy their link or share it through the platforms you enable (X, Facebook, WhatsApp, SMS and email). Send friends to a dedicated landing page that explains the offer, not your homepage. GHOST shows how it looks in practice: the member's account has a personal referral link offering friends 20% off their first order.

The Code Entry button and referral link in a member account (personal details removed). From our GHOST breakdown.

Give every customer the same offer

All customers should have the same incentive to refer their friends. A flat offer is easy to explain and fair to everyone who shares, and it keeps your referral program simple. Bigger rewards for some groups add rules to explain without giving most customers a reason to share.

Ask advocates to disclose the reward when they share publicly

If advocates share your link publicly, for example in a social post, the reward they earn can count as a material connection under the FTC's Endorsement Guides. 16 CFR § 255.5 says a connection the audience would not expect, and that might affect how credible an endorsement seems, must be disclosed clearly and conspicuously. It lists payment and the provision of free or discounted products among those connections, whether or not the advertiser requires an endorsement in return. A short line in your referral terms and in the default share message, asking advocates to mention that they get a reward, covers the basics. This is general information, not legal advice, so check with your own counsel for your situation.

Measure four things

Track these four numbers:

• Participation rate: the share of your active customers who send at least one referral in a year.
• Referral conversion rate: of all referral links clicked, the share that turn into a purchase.
• Referred-customer lifetime value, compared with what the customer cost you to acquire.
• Advocate repeat rate: the share of advocates who refer more than once.

I don't give target ranges, because they vary by category and by offer. Compare your own numbers month to month and with the cost of your reward.

How referrals work in Mage

Every customer in the program gets a unique referral link. When they share it and a friend clicks it, the friend lands on your store or a landing page you choose. Once the referral converts, both the advocate and the friend receive their rewards automatically. Each campaign defines what counts as a conversion: a sign-up, a purchase or both. The Referrals overview explains the full flow.

There are two ways to run it. Basic referrals give you two reward slots, one for the friend and one for the advocate, set up in a few steps (Basic referrals setup). Referral campaigns have their own rewards, design and settings. Global settings, including the landing page, social sharing and fraud prevention, are covered in Referrals settings. Our Shopify referral program page shows how it fits with points, VIP tiers and customer accounts.

Love Sweat Fitness runs one: give $10, get $10. Friends save on their first order and the referrer earns $10 once it goes through, with device and IP fraud protection built in. Read the Love Sweat Fitness case study.

Referral program mistakes

Rewarding only one side

If only the advocate or only the friend gets something, the other has no reason to act. Reward both.

Setting a reward you can't afford, or one nobody notices

Do the sum on your margins and average order value first. A reward that is too small to notice gets ignored, and one that is too large eats the margin on every referred customer.

Leaving fraud settings off

Self-referrals, email aliases and shared devices are the usual ways to game a program. Turn them all on before launch.

Paying the advocate before the order is safe

A cancelled or returned order after the reward is released costs you twice. Use the hold.

Hiding the offer

An offer that appears in one welcome email is easy to miss. Put it on the post-purchase page, in emails, in the account and on your loyalty landing page, and send friends to a page that explains it.

How to launch a referral program

Decide what you can afford per referred customer, set the same reward for both sides, add a minimum first order, switch on every fraud setting and choose the advocate hold. Create a landing page for friends, then show the offer in the four places above. Track the four numbers each month. For the wider picture, see our referral program guide, our comparison of the best Shopify referral apps and our guide to loyalty marketing. If you also run VIP tiers, see our guide to tiered loyalty programs.

Frequently asked questions

What is the most important referral program best practice?

Reward both sides. The friend needs a reason to act on the link and the advocate needs a reason to share. 11 of the 16 programs we compared reward both.

How much should a referral reward be?

Look at your margins and average order value and work out what you can realistically afford per referred customer, then make it large enough that both sides notice. Among the 16 programs, the friend's reward runs from 10% to 40% of the minimum first order.

Should I use store credit or a discount code?

A discount code. It is the easiest for customers to understand and has the least friction.

Should I set a minimum order for referred friends?

Generally yes, though how high depends on your margins. 8 of the 16 programs set one, from $25 to $100.

How do I stop referral fraud?

Turn on every fraud setting: block email aliases, block self-referrals, block advocate self-claims, block the same IP and block the same device. Mage has a setting for each, and blocked attempts are logged with the reason.

When should the advocate be paid?

After the friend's order is safe from cancellation or return. In Mage the default is 14 days after the friend pays, and you can release it on fulfilment or at payment instead.

Where should I promote my referral program?

On the post-purchase page, in your emails, in the customer account and on your loyalty landing page.

Do advocates have to disclose that they get a reward?

Possibly, if they share publicly. The FTC's Endorsement Guides (16 CFR § 255.5) list payment and free or discounted products among the connections that must be disclosed when the audience wouldn't expect them. Ask advocates to say they get a reward, and check with your own counsel. This is general information, not legal advice.

Does every store need a referral program?

I don't see a reason not to run one. Set the reward from your margins and turn on the fraud settings first.