Hi Paul, very good question, in-fact so many of us needs to get better advice on that. I have just started working on that, saying so, I created my very 1st coupon code, but no use as of yet, with the hope that it might eventually work, am keeping it. I will keep experimenting further. So for now I am on study mode on coupon codes and it's proper use:))...
Not successful though, still like to share one handy link, which might work for you, so just have a look.
https://www.etsy.com/teams/7718/questions/discuss/12193317/What I think is, you have to decide how you want to go for coupon codes n it's promotion depending on your shop, like product type, who are your target customers, how to approach new customers, how many items you have, how much they cost in total, lowest price, highest price. You have to figure out all of your costs, and run a cost/benefit analysis of selling at a lower price, either through a sale or a coupon.
If you discover something please share.