There is a choice, but that only applies for direct referrals with either your email address or if someone signs up without a promo code via an affiliate link.
Also, though there is some controversy about this, I believe your choice of $5 or 5% still applies to your secondary referrals.
Those are the cash discounts provided by your promo code. So if you offer $50 (the max), that amount is taken right off the top of the amount someone using your promo code pays for their hosting. In other words, if they choose 1 year prepaid, they'd only have to pay $69.40 instead of $119.40.
Note that you can mix and match discounts and extra features. Also note that you can provide different discounts for different prepayment plans, though I think that is fairly confusing and don't recommend it.
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