Coupons are applied at time of payment. You can create coupons with a percentage discount or dollar amount discount and they can be given an expiration date. They may also be designed to be used once by your customer or any time your customer orders.
You can require a minimum order amount and/or require your customer to purchase a certain item in order to redeem the coupon. If you require an item, you can set the maximum number of items that the discount will be applied to.