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Death occurs when Shovel Knight runs out of health, falls in a pit, touches spikes, or is crushed between moving platforms. Upon dying, a 25% of Shovel Knight's accumulated wealth is dropped as winged bags of money that float around where he died. The amount of money lost upon death is halved if the player is wearing the Final Guard Armor. The bags can be retrieved after restarting at a Checkpoint, but if Shovel Knight dies or finishes the level without collecting the bags, the treasure is lost. The Fishing Rod can be used to retrieve hard-to-reach bags.

Finishing a level without dying will award the player the I'm Alive! feat, and finishing the entire game without dying will award the player the Impossible! feat.

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