Holiday Preparedness: How Coupon Extensions Impact Ecommerce Sales

by Marshall Moritz, on Oct 14, 2021 9:00:00 AM

It may seem logical to think that high affiliate fees and coupon activity from browser extensions like Honey and CapitalOne Shopping during your holiday sales are signs of a healthy and successful discounting strategy.

But in reality, browser coupon extensions are doing more harm than good, cutting into your ROI, wreaking havoc on your attribution reporting, and using cookie stuffing techniques to claim credit for sales they had no part in driving.

As these browser extensions continue to grow in popularity, steep holiday weekend discounts leave you particularly vulnerable to the financial harm caused by coupon fraud and  automatic injection.

If you’re struggling with high affiliate fees, leaked discount codes, or are losing money on your discount strategy, using a coupon blocking solution like cleanCART can help recover revenue you might otherwise lose to coupon extensions and protect your business from harmful coupon fraud.

 

What is Coupon Fraud?

Coupon fraud occurs when a shopper improperly redeems coupon codes for discounts they didn’t earn.

With browser coupon extensions like Honey and CapitalOne Shopping, when a shopper using a discount extension enters a coupon code that they legitimately earned into your checkout cart, the extensions are able to scrape and share that code with anyone that has the extension installed.

This kind of improper distribution and redemption takes away your control over who receives discounts on your products while also harming your business by:

 

  • Overextending your coupon campaign beyond your intended audience, harming your ROI
  • Artificially boosting the performance of affiliates whose codes have been scraped and shared by extensions, leaving you overpaying affiliate fees (or conversely, penalizing successful affiliates by overwriting their codes with other, higher-value discounts, and stealing attribution from them in the process)
  • Skewing attribution data by making under-performing channels appear more successful (and reducing the perceived performance of your best channels)
  • Taking up your team’s valuable time by forcing them to track down errant coupon codes

 

The holidays are often a “make it or break it” time for ecommerce businesses, and in all of these cases, coupon extensions hold the potential to “break it.” As we head into the busy Q4 holiday season, there are lessons to be learned from earlier experiences over Prime Day, Labor Day, and more.

In the examples below, our data shows how online retailers experienced large spikes in sales over holiday weekends, coupled with increases in improperly redeemed coupon codes, resulting in what could have been thousands of dollars in lost revenue.

--Article Continues Below--

cleanCART demo

--Article Continues Below--

Prime Day

In the days surrounding June 21, 2021, this year’s Prime Day shopping holiday, data gathered through cleanCART showed massive spikes in coupon extensions automatically injecting codes like “Prime”, “$10”, “$5”, and others indicative of Prime Day sales.



Total Increases In Blocked CouponsTotal Increases In Blocked Coupons

legend

 

For one retailer (we’ll call them Store A), gross sales increased 15x from June 19th to June 21st. At the same time, automatic injection of discount codes skyrocketed as Honey scraped and attempted to apply codes from the boosts in sales. 

 

Store A’s Prime Day Gross Sales x Estimated Savings From BlockingStore A’s Prime Day Gross Sales x Estimated Savings From Blocking

 

Because Store A had cleanCART installed on their website, they were able to recover more than $3,000 in revenue that otherwise would have been lost due to coupon extensions. 

Similarly, as Store B began to release new coupon codes for the holiday, gross sales increased over 16x in the week leading into Amazon Prime Day.

 

Store B’s Gross Sales x Estimated Savings From BlockingStore B’s Gross Sales x Estimated Savings From Blocking

 

Shortly afterward, they saw huge spikes in the volume of attempted coupon injections after those codes (which were manually entered by their customers) began to be scraped off their site by coupon extensions. Without cleanCART, Store B would have lost $28,000 in revenue to coupon extensions while also generating unreliable marketing attribution data and overpaying affiliate fees.  

 

Labor Day Weekend

Continuing this summer holiday trend, cleanCART users also saw significant spikes in both sales and coupon injection attempts over the Labor Day long weekend.

Store C’s coupon code “LDW” offered customers 13 to 17% off products at checkout, though it reached up to 65% off in some carts. 

 

Labor Day Weekend Increase in Store C’s “LDW” Coupon CodeLabor Day Weekend Increase in Store C’s “LDW” Coupon Code

 

Over the long weekend, the code was scraped, shared, and automatically injected over 2,200 times in over 1,700 Carts. Thankfully, because the retailer was protected by cleanCART, the automatically injected codes were blocked and roughly $3,500 in revenue was recovered in just one week - all with no impact on cart abandonment rates.

In the days leading up to Labor Day, Store C averaged $12,900 in gross sales whereas on September 6th, sales increased by 78% to $22.9k 

 

Store C’s Labor Day Weekend Gross Sales x Estimated SavingsStore C’s Labor Day Weekend Gross Sales x Estimated Savings

 

Had Store C not been using cleanCART, the automatic injection of “LDW “ by coupon browser extensions would have cost them over 15% of their Labor Day weekend revenue. 

In another example, a fourth retailer (Store D) averaged $14,100 in gross sales in the days leading up to Labor Day, while sales increased 76% to nearly $25,000 on the holiday itself.

 

Labor Day Weekend Increase in Store D’s “Labor” Coupon CodeLabor Day Weekend Increase in Store D’s “Labor” Coupon Code

 

During this time, the number of attempted injections for the coupon code "labor" (which offered discounts upwards of 30%) skyrocketed, and in the first three weeks of September it was blocked by cleanCART over 3,300 times in over 2,600 Carts. 

Had these automatic coupon injections been successful, this code would have been single-handedly responsible for reducing Store D’s revenue by over $15,000.

 

Store D’s Labor Day Weekend Gross Sales x Estimated SavingsStore D’s Labor Day Weekend Gross Sales x Estimated Savings

 

With cleanCART, Store D was able to recover 30% of revenue from transactions that otherwise would have been lost to coupon codes, without needing to exhaust the team’s resources monitoring coupon code leakage during these peak holiday sales.

 

Protecting Your Holiday Revenue

Coupon leakage and improper discount code redemption wreak havoc on your ecommerce revenue, attribution reporting, and affiliate marketing, with their impact dramatically magnified during key holiday sales events.

Leaving your discount strategy unprotected can end up costing you thousands of dollars, and eat up your energy and resources as you try to manually track down the problem. Given the importance of maximizing revenue during the holidays, this is an aspect of your ecommerce business that you cannot afford to ignore.

If you’ve experienced coupon code leakage in the past or simply want to see what coupon blocking can do for your revenue, you can sign up for a cleanCART free trial here.

Blocking Coupon Extensions and the Impact on Merchant Revenue

Topics:ecommerce

Our blog

Where businesses come to learn more about protecting the points of digital engagement with their customers, audiences and users.

Subscribe to Updates