How to Prevent Coupon Code Abuse

Worried about coupon leaks and abuse? This article will walk you through our recommended best practices.

Andre Tan avatar
Written by Andre Tan
Updated over a week ago

Coupon codes and e-commerce promotions are an effective and easy way to attract new customers, but you must do your homework to ensure success and minimize abuse.

Online shoppers have a seemingly infinite number of brands and offers to choose from at the touch of their fingertips, making them extremely price-conscious. More than 90% of online consumers say they search for and use coupon codes while shopping online.

If you don’t already offer coupons, then you’ll need to decide whether they make sense for your brand in the first place. Coupons typically work best in markets that are highly competitive or commoditized. Especially when pairing the coupons with a limited-time window, you can even encourage more impulse buys.

However, coupon code abuse can occur when your affiliate’s coupon codes become widely available online. Customers might find an affiliate’s coupon code through search engines or browser extensions, and even when not referred by these affiliates, will use them, causing you to pay out extra to affiliates and muddy your marketing attribution

What can you do to prevent it?

Here are some tips on how you can protect yourself, your company, and your business’ viability against coupon abuse:

1. Offer exclusive coupons

If you are planning to distribute a coupon code, then the best way to control it and stick to your projection is to limit the promo duration, campaign budget, and perhaps the number of maximum redemptions for each coupon. Going further, you can specify which products or categories you'd like to promote, and you can also set the codes to only be single-use-per-customer. Coupon snipers will become frustrated to not find a site-wide discount.

2. Limit the duration of coupon codes

Give affiliates coupons that expire quickly. On top of this you can change your code pattern often and make sure that old coupon codes are fully deactivated. A coupon site with many codes that users report as unsuccessful can motivate a customer to just check out without one.

Short campaigns can also bring ‘scarcity marketing’ benefits. The limited time-frame creates a sense of urgency and exclusivity around the code, increasing the chance that a code is immediately used and improving its perceived value

3. Control the distribution of your coupons

Don’t distribute your coupons codes so openly especially if they are generic or free to use by everyone. Oftentimes, coupon abusers are just waiting to grab that opportunity. To acquire new customers, distribute unique codes across social media campaigns or target those who are already engaged. When partnering with affiliates, make sure each coupon is attributed properly to each marketing channel, so you can easily and in real-time, monitor each campaign’s Revenue On Investment and act accordingly. If you’re using coupons to track your campaigns, then also track Customer Lifetime Value to see how profitable those newly acquired customers are

Another tip you can consider is maintaining your own coupon page. If you’re offering coupons to external sites, then you can also publish promotional or seasonal codes on your own site. You can either link to this page prominently in your header, if you’d like more people to see it, or if your brand necessitates a more subtle approach to coupons, then you can link to it on your checkout page. This way, there’s less likelihood that a shopper who’s about to buy something from you will bounce out to an external coupon site. Without this, your visitors might seek out coupons for your store on outside coupon sites.

4. Set benchmarks for affiliates and monitor performance

An effective way to discourage abuse especially from “illicit” referrers or affiliate partners is to control their KPIs. Monitor affiliates, track how much their revenue contribution is driven by coupons, and benchmark their redemption data altogether - any anomaly might indicate that their coupon code has leaked online. To not lose an affiliate partner, simply direct your partner to decrease the coupon usage or set a limit upfront. Also, by having your program terms clearly stated, you have the added safety net of not paying out any commissions to publisher sites that don’t comply and abide by your directions.

In addition, the easiest way to limit the damage caused by a leaked coupon code is to keep a close eye on the promotion. While you want your promo codes to be used by targeted audiences, if you keep track of use rates, then it’s easy to spot when a code is being exploited because it’s being used far more than would be expected. If you notice something like this happening, then you can shut down the code. You can then offer legitimate users a new option

5. Negotiate placements and promotions with your affiliates

Rather than letting coupon sites promote you autonomously, work with them and negotiate placements and special distribution deals. You can often score a homepage placement or inclusion in their email newsletter in exchange for an exclusive discount code or an increased commission rate. Run trials of these types of placements with various coupon sites and see who performs well.

The Bottom Line

Shoppers will always love a good deal, and with many tools at their disposal, more and more of today’s shoppers are becoming masters of online shopping. Finding a way to work with coupon sites can be an essential part of your marketing mix. However, you must be vigilant and protect your brand. Understand your marketing strategy and how coupons should fit in, find high-quality partners, and keep a list of best practices handy

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