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Referral programs turn your existing customers into brand advocates. By rewarding users for inviting their friends, you create a self-sustaining growth loop that lowers acquisition costs and increases customer lifetime value. Learn how referral mechanics work, from rewarding the referrer and the referee to managing multi-level programs.

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Key referral concepts

The following concepts are key for understanding the referral program.
The existing customer who shares their unique referral code with others. They receive a reward once their friend redeems the code or performs the custom event.
The new customer who joins using a referral code or performs the custom event. They often receive a “welcome” incentive to encourage their first interaction with your brand.
A unique code assigned to a referrer. When a referee redeems (uses) this code, Voucherify links the two profiles to track the successful conversion event.
A conversion event is the specific action that triggers a successful referral in Voucherify. Each campaign can only have one primary conversion event: code redemption or custom event.
A reward level that defines when and how a referrer is rewarded. Tiers enable milestone-based and multi-level referral programs.There are two criteria for rewarding the referrer:
  • Each unique referee redemption
  • Minimum unique referee redemptions
By setting referral tiers, referrers can receive better rewards when they refer, for example, more than 20 people, and even more rewards when they refer more than 50.
An incentive issued to referrers and, in double-sided programs, to referees. Rewards can include discounts, gift credits, or loyalty points.
The assignment of a referral code to a specific customer. Codes must be published before a customer can start referring others.Optionally, codes can also be shared by non-referrers, allowing multiple people to distribute the same code.
A setting for referral programs that ensures a customer can hold only one referral code per campaign. Once set, this can’t be toggled off in the Dashboard.
An optional mode where the application automatically generates new unique referral codes when the initial batch runs out.

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Referral program types

When setting up your incentive workflow in the Campaign Manager, you must decide between a single-sided or double-sided structure. This determines who is rewarded when a conversion event occurs.

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Single-sided programs

In a single-sided program, only the referrer (the person sharing the code) is rewarded. The referee (the invited friend) joins the program or performs an action but does not receive an incentive from the referral campaign itself.
Diagram showing a single-sided referral program flow.Diagram showing a single-sided referral program flow.

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Double-sided programs

A double-sided program rewards both the referrer and the referee. This “mutual benefit” model is often more effective at driving high conversion rates because it incentivizes the invited customer to complete their first purchase or sign-up.
Diagram showing a double-sided referral program flow.Diagram showing a double-sided referral program flow.

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Conversion events

A conversion event triggers a successful referral either by redeeming a referral code or by triggering a custom event in your system.

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Referral code redemption

The most common conversion event is a successful redemption.
  1. The referrer shares a code with a referee (new customer).
  2. The referee uses the referral code during a checkout process (redemption).
  3. Voucherify marks the customer as “referred” the moment the redemption is successful. If a discount is assigned to the referee, it is applied directly to their order during this step. Then:
    • 3a: Referee receives a reward in case of a double-sided program.
    • 3b: Referrer has a successful referral and receives a reward as configured by the program.
A referrer can’t redeem the code they own. Only referees can.
Diagram showing a referral program flow with a redemption as a conversion event. The diagram shows also that the referee and referrer are awarded upon successful redemption.Diagram showing a referral program flow with a redemption as a conversion event. The diagram shows also that the referee and referrer are awarded upon successful redemption.

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Custom events

Prerequisite: Developer setupTracking custom events in your system requires sending them to Voucherify through POST Track custom events API endpoint.
When Voucherify tracks your custom events, the conversion event flow looks as follows:
  1. The referrer shares a code with a referee (new customer).
  2. Voucherify counts a successful referral only after receiving the API call for the specific event. The API request should include the referee’s details and the referral code.
  3. After the custom event, the referrer and the referee (in a double-sided program) are rewarded:
    • 3a: New loyalty points or gift credits are assigned to the referee’s account after they perform a custom event.
    • 3b: Voucherify notes another successful referral and assigns a reward to the referrer (reward redemption).
  4. If a referee’s reward is a discount code, it is applied to the referee’s order during the referral code redemption.
Diagram showing a referral program flow with a custom event as a conversion event. The diagram shows also that the referee and referrer are awarded when the custom event is triggered.Diagram showing a referral program flow with a custom event as a conversion event. The diagram shows also that the referee and referrer are awarded when the custom event is triggered.

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Referee rewards

In double-sided programs, the new customer also receives a reward when the conversion event occurs.

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Reward types

You can choose from several reward categories depending on your business model:
  • Discount coupon: Applies an immediate discount (e.g., 20% off, free shipping, or a fixed amount) to the referee’s order when the referral code is used for redemption.
  • Gift card credits: Adds a specific balance to the referee’s gift card.
  • Loyalty points: Adds points to the referee’s loyalty card, which can be redeemed for future rewards.
If a referee doesn’t already have a loyalty or gift card, Voucherify will automatically publish one to their profile before adding the points or credits.

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Validation rules for referees

To prevent fraud and ensure high-quality leads, you can add a validation rule to referee rewards. The recommended default rule is Redemptions per customer in a campaign set to 1. This ensures that each new customer can only be “referred” once, maintaining the integrity of your campaign budget.

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Referral workflow

Voucherify supports the referral program lifecycle through the following stages:
1

Configuration

Build your referral logic in the Dashboard. This includes selecting conversion event, reward tiers and criteria, and defining specific rewards.
2

Enrollment and sharing

Assign referral codes to your advocates through publication. You can use distributions to send these codes with email, text messages, or display them directly in your application.
3

Conversion

When a friend performs the conversion event (code redemption or custom event), they provide the referrer’s referral code. Voucherify checks the code and records the link between the referrer and the referee.For double-sided programs, the referee receives their reward at this step.
4

Reward triggering

Once the defined criteria (each unique referee redemption or minimum unique referee redemptions) in a referral tier are met, Voucherify automatically triggers the reward for the referrer.
5

Analysis

Track the performance of your referral campaigns using real-time reports to understand what drives customer engagement.
Last modified on February 12, 2026