In Square, you create discounts in Square Dashboard under Items, then Discounts. A discount can be a fixed amount or a percentage, applied manually by staff at checkout or automatically when an order meets rules you set, such as specific items, a quantity, a schedule or a date range. That is enough to run happy hours, BOGO deals, combo pricing and limited-time offers.
This guide covers how each discount type works, how to set up the most common restaurant promotions, and how to keep them profitable.
The discount types in Square
Square offers four basic discount types:
- Amount: a fixed dollar value off, such as $2 off.
- Percentage: a set percent off, such as 10% off.
- Variable amount and variable percentage: the cashier enters the value at checkout. Useful for comps and one-off service recovery.
Each discount is either manual (a team member taps it at checkout) or automatic (Square applies it when the sale meets your rules).
How to create a discount
- In Square Dashboard, go to Items & services (it may be labeled Items & menus or Items & inventory on your account), then Items, then Discounts. You can also manage discounts in the Square POS app under More, Items, Discounts.
- Click Create a discount and give it a clear name staff will recognize, like "Happy Hour Drafts" or "Staff Meal".
- Choose the type and value.
- Select the locations where the discount applies.
- Add rules if you want it to apply automatically (see below), then save.
Automatic discount rules you can use
Automatic discounts remove guesswork at the register. Square lets you combine rules such as:
- Items or categories: the discount applies when chosen items or categories are in the order.
- Quantity: an exact quantity, a minimum quantity, or buy one, get one. Set the BOGO discount to 100% for a free item.
- Customer group: applies when a customer from a selected group in your Square customer directory is added to the sale.
- Schedule and date range: limit the discount to certain days, times and dates.
- Minimum spend: require a subtotal of at least a set amount.
- Maximum discount value: cap how much a single discount can take off.
Note that discounts with rules default to manual, so turn on automatic application when you set it up. You can also require a passcode for sensitive discounts and choose whether the discount applies before or after tax.
Five restaurant promotions and how to build them
1. Happy hour
Create a percentage or amount discount on your drinks or appetizer category, set a schedule (for example, weekdays from 3 to 6 p.m.) and turn on automatic application. Staff never have to remember to apply it.
2. Buy one, get one
Choose the item, set a buy one, get one quantity rule and a 100% discount for the free item. Good for slow days or launching a new pastry.
3. Combo or bundle pricing
Use a minimum quantity rule across a category ("any 2 tacos") or an item rule that combines a main and a side. Keep the math simple so guests understand the deal at a glance.
4. Staff and community discounts
Create a manual percentage discount with a passcode for staff meals, and separate named discounts for local partners, first responders or students. Separate names keep your reports readable.
5. Limited-time offers
Set a date range so a seasonal promo starts and ends on its own. No one has to remember to switch it off.
Keep promotions profitable
- Discount high-margin items. A drink or side with a low food cost can absorb a discount much better than your most expensive entree. Our guide to maximizing profit margins with Square analytics shows how to find them.
- Target slow periods. A discount at your busiest hour mostly gives money away to guests who would have come anyway.
- Set a goal and an end date. Decide what success looks like (more covers on Tuesday, a new item trial) before you launch.
- Exclude items that should never be discounted. In your item settings, you can mark items or variations as not eligible for discounts, such as gift cards or alcohol where local rules restrict promotions.
- Review results in Square reports. Compare discount totals and item sales before, during and after the promo.
Common mistakes
- Too many overlapping discounts. Stacked offers confuse staff and can eat your margin. Keep a short list and retire old ones.
- Vague names. "Discount 3" tells you nothing in a report six months later.
- Forgetting online orders. Category-based automatic discounts do not apply to Square online orders, so select individual items if the promo should work online too.
- Giving everyone manual discount access. Limit who can apply variable discounts and use passcodes where it matters.
Promotions vs. loyalty
Discounts bring people in once. Loyalty brings them back. Many restaurants use short promotions to attract new guests and a rewards program to keep them. If you have not set one up, read our guide to setting up a Square Loyalty program, and see menu scheduling and specials for time-based menus that pair well with happy hour pricing.
How Orda fits
A promotion only works if guests hear about it. With Orda, Square restaurants get their own branded iOS and Android app with push notifications, so you can announce a happy hour or limited-time item straight to your regulars' phones. The app supports coupon codes and Square Loyalty rewards at checkout, and every order flows into Square POS. More than 10,000 Square businesses have used Orda. See how it works with marketing for mobile ordering.