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How to Increase Ecommerce Revenue by Preventing Unauthorized Coupon Usage

by Andrew Reed, on Apr 20, 2021 9:00:00 AM

If you are running an ecommerce business, it’s more than likely your margins are being cut into by coupon browser extensions like Honey and Capital One Shopping.

About a third of online shoppers have these extensions installed, and last year alone, Honey successfully reduced merchant revenue by $1.6 billion, according to their own numbers.

Browser extensions like these may be hijacking your discount strategy and allowing it to run rampant and unchecked, giving you less control over your business and cutting into your ROI.

How Coupon Extensions Hurt Your Online Business

These increasingly popular coupon extensions have heavily modified the way customers earn coupon codes and, in turn, affect merchants’ coupon strategy and ROI.

Customers with Honey and CapitalOne Shopping receive discounts at the bottom of your sales funnel, when they have already shown purchase intent. Those coupons are injected right before checkout, when the customer has already filled their cart and is reaching for their wallet.

Unlike manually entered coupon codes, automatically injected codes aren't driving buyers to your site. Rather, they're being handed out at the moment where most —roughly 98%— of buyers have already abandoned their purchase. 

What this means is that the remaining 2% of shoppers that are in your cart have already demonstrated high purchase intent. So when coupon extensions offer them discounts at checkout, they are likely just eroding the profit margins on a sale that you would have made anyway.

On top of this, automatically injected coupons wreak havoc on your attribution metrics. A coupon code targeted towards shoppers that sign up for your newsletter might seem like it's doing really well, making you think you are gaining a bunch of new leads.

But in reality, this code could have been scraped off your site and shared with shoppers who received the discount without giving you their information or subscribing to your newsletter. 

Or worse yet, if you are using an affiliate program, it’s possible that you end up overpaying your third-party affiliate because the code you created for them has been hijacked by coupon extensions and has overextended its intended reach. 

Over-paying and handing out unearned discounts? Ouch.  

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Taking Back Control of Your Coupon Strategy

There's no doubt that coupon extensions can wreak havoc on your ecommerce strategy. There are a few ways to combat this issue, but the first step is taking a serious look at your coupon strategy.

Keep an eye on your attribution reporting. If specific coupon codes that are meant for small audiences (say, military veterans or friends/family) are being used at higher volumes than you’d expect, it’s possible Honey or CapitalOne Shopping is scraping them off your site.

Also, check your highest discount promo codes for overuse. Again, look to see if they are being used at higher volumes than you’d expect. The Honey and CapitalOne Shopping algorithms are designed to look for the best deal possible, so your larger discount codes are more susceptible to automatic injection.

Finally, make a list of checkouts that have used “activity-based” coupons (e.g. sign up for the newsletter and receive 10% off) and make sure the number of coupon redemptions matches up to the number of people who have completed that activity (e.g. that they are, in fact, signed up for the newsletter).

If you go through these steps and find that something doesn't look right, it’s likely coupon extensions are scraping codes from your site and sharing them with anyone who uses the same extension.

Manual Solutions

The next thing you can try is to go through a few manual and often lengthy, but altogether free, processes to curb your revenue losses.

First off, go to Honey (or whichever extension you believe is giving you the most trouble) and ask them to take these codes off your site. They may not make it easy for you to do this, and in the process, will most likely ask you to join their affiliate program. 

Check out this thread in the Shopify forum where several users detail their experiences trying to get their codes off Honey’s website, and this quick quote from a frustrated user: 

They were not particularly helpful.

They have offered to remove any coupons we don’t want displayed on Honey but have dodged all questions.

To say that this is inconvenient is an understatement. Who has time to send Honey an email every time we release a new coupon to our loyal customers?

It appears that they have no way to (or are unwilling to) allow stores to opt-out of the honey ecosystem. They have dodged my questions about this time and time again.

Whether you like it or not, the Honey app will extract, store and share any coupon used by your customers who have the Honey extension running on their browser.

Your other option is to create coupons with brief lifespans. This way, by the time a coupon extension begins to automatically inject them, they will have already expired.

While this can be an effective solution, it can also be very time consuming. You’ll spend much of your time and energy reproducing ads and emails with updated codes, as well as having to constantly reach out to your affiliates to change up the codes they're sharing.

And in the end, while these solutions may cost nothing upfront, the time and energy you’ll spend trying to manually combat coupon leakage may end up costing you in the long run.

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ecommerce resource center

Read Now: The Complete Ecommerce Resource Center

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An Automatic Solution

By far the most attractive solution is one that makes the problem disappear entirely. Our cleanCART script does just that.

Just install a single line of code and cleanCART will automatically prevent Honey and CapitalOne Shopping from injecting hijacked coupon codes into your checkouts. 

Whether you’re experiencing significant drops in your margins or not, by signing up for the free trial you'll get a closer look into your coupon strategy and how coupon extensions may be harming your business.

We’re blocking thousands of automatically injected coupons every day, giving businesses more control over their marketing strategies while also protecting their revenue. 

Click the link below to see about getting a free trial.

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Topics:ecommerce

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