First Login to the Magento Admin Panel and go to Promotions > Shopping Cart Prices Rules. Then click on the “Add New Rule” link at the top of the page. You’ll get a new page with three tabs down the left hand side.
Give your new rule a name, set the status to Active and choose which customer groups it may be applied to. Next enter your coupon code, make it something simple, but nothing too easy to crack “EARTHDAY12”, “NEWYEAR2012” something along those lines. You can choose to set the users per coupon and uses per customer. Next choose the start and end date of the promotion, or leave blank to allow them for all time.
Skip the Conditions tab. You can use this to set specific rules which must be true before the coupon will be applied. For example you could require a product form a specific category to be included in the cart. Otherwise leave this blank and click on the Actions tab.
Choose where you want to discount applied in this instance we want to apply a 10% discount to everything in the cart so choose “Percent of product price discount” and set the discount amount to 10. You can specify a maximum number of products to apply the discount, and a discount quantity step. Specifiy if the coupon included free shipping and select wheather or not to allow more rules to be applied to the cart.
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