Average Order Value: Formula and How to Raise It

By Alva Chew · Updated 2026-11-02

Definition Average order value (AOV) is the average amount a customer spends per order. The formula is total revenue divided by the number of orders. A café that takes US$3,000 across 400 orders in a week has an average order value of US$7.50.

What is average order value?

Average order value is the average amount a customer spends each time they pay. It is usually shortened to AOV. A café with a high figure sells more per customer visit, whether through bigger drinks, food added to a coffee or more people paying per bill.

It answers a plain question: when someone buys from me, how much do they spend?

How do you calculate average order value?

Formula: total revenue in the period ÷ number of orders in the period.

Item	Illustrative number
Revenue last week	US$3,000
Orders last week	400
Average order value	3,000 ÷ 400 = US$7.50

These numbers are made up to show the arithmetic. Your till report usually gives you both inputs.

Which revenue should you count?

Pick one definition and keep it. Most owners count sales before tax and tips, and net of refunds. A few choices change the figure a lot:

Tax and tips. Leave them out so the number reflects what customers chose to buy.
Discounts. Count revenue after discounts, since that is the money you took.
Split bills. If one table pays in three payments, your till may record three orders. That pulls the average down, so note how your system counts them.

How is it different from other averages?

Average order value measures spend per order. It says nothing about how often a customer returns. Repeat purchase rate covers that. A shop can have a large average order and few repeat buyers, or the reverse. Track both, because revenue depends on spend per visit and on the number of visits.

How can you raise it?

Most changes come down to getting a customer to add one more item or choose a larger one. Common approaches:

Pairings. Place a pastry next to the coffee till, or offer a side with a main.
Sizes. Make the next size up easy to see on the menu.
Bundles. Price a drink and snack together at a small saving.
Spend-linked rewards. Reward customers in proportion to what they spend.

Try one change at a time and give it a few weeks. Compare the new average with the old one, and check order count too. If you discounted to get the larger order, your margin may have shrunk even as the average rose.

How does a points program affect it?

In a points-based loyalty program, customers earn points in proportion to the amount they spend. A customer close to a reward may add an item to get there sooner. Whether that happens in your shop is something to measure, and not something to assume.

The earn rate sets how strongly spend turns into points. Our guide to setting your points earn rate walks through the sums. Compare members against non-members, and the same members before and after they joined. Members may already be your biggest spenders, so the first comparison alone can mislead.

What is a good average order value?

There is no single good number. A coffee stand and a sit-down restaurant sell very different baskets, so a figure from another business says little about yours. Measure your own average for several periods, then judge changes against that baseline. A rise from US$7.50 to US$8.00 after a change you made tells you more than any outside benchmark.

Tracking it with Gimify

Gimify awards points in proportion to the purchase amount, and staff add them from any phone at the counter. Members keep one points balance across every outlet. The free plan covers one outlet with unlimited members.

Questions owners ask

How do I calculate average order value?

Divide total revenue for a period by the number of orders in that period. If you took US$3,000 from 400 orders last week, your average order value is 3,000 / 400 = US$7.50. Use the same period and the same revenue definition every time.

Should I include tax and tips in revenue?

Leave both out so the figure reflects what customers chose to buy. Whatever you decide, keep the definition the same every time, or changes in the number will reflect your method and not your customers.

Is average order value the same as average transaction value?

In a shop or café the two usually mean the same thing, the average spend per payment. Online stores tend to say order, and tills tend to say transaction. Check how your till counts a split bill, because each payment may register as its own order.

Does a higher average order value always mean more profit?

No. A higher figure can come from discounts that cut your margin, or from fewer, larger orders while visits fall. Read it next to order count and gross margin before deciding a change worked.

Can a points program raise average order value?

It can, and you should test it. Points earned in proportion to spend give customers a reason to add an item. Compare the average order of members before and after joining, and watch whether visits also change.