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We want the cheapest product to be free when 3 or more products in the same category added in the cart. See instance below:

Cart Items:
Qty: 2 - Prod 1 - Price: 20 - Total: 40 - Cat 1
Qty: 1 - Prod 2 - Price: 10 - Total: 10 - Cat 2
Qty: 5 - Prod 3 - Price: 10 - Total: 50 - Cat 1 <- cheapest

Total: $100

So we want to offer 1 quantity free to Prod 3 only since it's the cheapest item in the cart. So, we offer $10 discount based on Prod 3.

Is this possible with Magento Promotions?

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Unfortunately, Magento doesn't offer such a promotion in the standard. You need to do it programmatically.

This might be useful for you:

GITHUB Meabed - Magento buy x get the cheapest y for free

If you're not into programming, you can get the ready extension from the internet.

Example one:

Amasty Special Promotions Pro

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