Coupons can help fetch your business small incremental sales. However, if misused, they can impact your goodwill and finances significantly. That’s why it is crucial to understand the various fraudulent practices related to coupons.
Numerous tactics are in play by the retailers to counter the rise of coupon frauds. So how did it start, and how can you identify the coupon frauds and take corrective measures against them?
How Did It All Start?
The increase in social interaction digitally has led to a change in our way of doing things. Nowadays, someone availing a benefit using a coupon while shopping instantly shares it with their social circles. It is worth mentioning that coupons are usually for a single person’s use.
The proliferation of this happiness bubble is attracting fraudsters into the game to find out numerous ways to con people. They are altering the details of the coupon, including its validity, usage terms, and deals. A critical aspect that needs to be in the limelight is that businesses suffer losses due to such practices.
Numerous layers of a coupon transaction lead to further complications. The increased number of victims is proof of the rising fraudulent practices in this area. Businesses often seek partners who can help avoid incurring such losses. Taking this daunting task is not easy, and entities are rising to the occasion.
For instance, you can seek help from a payback company to put up a case and get your money back. Such a company will have an expert team that has helped recover millions of dollars.
There has been a rampant growth of online frauds in recent times. However, most businesses ignore them as there is no significant impact on their bottom line.
Negligence from each person in the ecosystem only aggravates the proliferation of fraud. The small contribution of each fraudulent activity ultimately leads to a large corpus of losses to the tune of $ 300-$ 600 million annually.
Impact of Fake Coupons on Business
Coupons are a promotional tool that a business uses to let their target audience know about a new offering or increase the reach of their existing offering. The rise in the adoption of coupons has led many companies to offer bulk coupon creation options for businesses. When you opt for such a service without due diligence, the chances are you do more harm than good.
This approach allows the fraudsters to get an idea of your coupon manufacturing sequence and create them as per their requirement. When your target audience uses such a fake coupon, it only contributes to the rise in agony and creates a negative impression for the brand.
The ultimate impact of such a condition is the loss of goodwill for the brand. It, in turn, will hit your top line, and you will have significant losses due to such practices.
Prevention of Coupon Frauds
The customers will have to be vigilant while opting for a particular coupon. However, as a business, you must put proper mechanisms and checks to ensure the identification of frauds whenever they happen. Your investment in security systems and validation mechanisms can help improve customer experience and reduce negativity.
If you can create our final where only the intended users can redeem the coupons, you will see an uptick in your brand loyalty and sales. Generating unique numbers that a system can track and trigger an alarm when fake codes get punched can do the job for you.
Many businesses are putting riders in place to cut down the impact of such fraudulent practices on their operations. These practices can include but are not limited to:
- Quantifying the validity for a coupon campaign
- Deactivating any old coupons which were in use earlier
- Validating each coupon via a unique code of which the system is already aware
- Controlling the distribution channels
- Promoting fair use of coupons by the target audience to reduce misuse risks
- Educating the customer about the fraudulent practices in existence so that there is an increased awareness among them
- Conducting audits in the market to identify the fraudulent practices in circulation
Therefore, a retailer or brand must implement ways to curtail the rising fraudulent practices with coupons. Some fraudsters use any loophole in the system, and customers willingly sharing their coupon codes can only aid them.
Businesses should note that coupons are a tool to increase sales and boost your brand reach. However, failing to have a proper strategy in place will only lead to significant losses without realizing any actual benefits for the business.