Dealing with promo code abuse can be a complex task, especially when it comes to detecting the extent of the abuse and calculating the financial loss incurred due to opportunistic customers. Here are our recommendations to gauge the extent of discount code abuse.
To understand how customers use unauthorized discounts, just act like they do.
Install and monitor popular browser extensions like Honey, Capital One Shopping, RetailMeNot, Slickdeals, WeThrift and Coupert. And then, go shopping on your Shopify store!
These tools apply the best coupon codes automatically, helping users save money. By keeping an eye on these, you'll know how customers are getting discounts and can adjust your strategies accordingly, by unactivating a leaked discount codes and taking action against afilliates that shared the codes.
Websites that publicize your discount codes operate similarly to browser extensions.
The most common websites are the following :
By searching “your-brand-name discount code” on Google, you can identify shady players that hide behind what affiliate platforms call “affiliate network”.
Often these websites, located in foreign countries, advertise on Google with your brand name to capture traffic of customers hunting for discount codes and earn affiliate commission.
A majority of such websites use geotargeting techniques to avoid detection (they ask Google to not display the add in the region the company is located), making it vital to use a VPN to see the real picture and take necessary action.
A prevalent method of discount abuse on Shopify involves creating multiple accounts to repeatedly benefit from welcome offers, like those provided by Klaviyo.
On average, fake accounts usually comprise about 5-10% of total e-commerce accounts. To counteract this, it's essential to rigorously analyze your customer accounts.
Begin by exporting a list of accounts, including their associated names, emails, phone numbers, shipping address and IP address.
During the analysis, look for:
Though this task may seem like a giant, complex puzzle, remember to keep your cool and enjoy the detective work!
Influencer discount codes are highly susceptible to leaks and misuse, as they are widely used by Shopifs merchants for their social media campaigns.
There are instances where the influencer themselves may leak their code to boost conversion rates, or the codes may be scraped by browser extensions.
To mitigate this, it's recommended to regularly analyze the conversions driven by each influencer and align them with key performance indicators of their account, such as follower count and engagement rate. This can be done by using data analytics tools to track the usage and performance of each influencer's discount code.
If you identify over-performers (influencers whose conversions significantly exceed their follower count or engagement rate), it's advisable to conduct a deep dive analysis into their transactions to detect any potential abuse. This can include checking for repeat usage from the same IP address, unusually large orders, and rapid succession of orders.
Machine learning is a powerful tool for detecting fraud.
By analyzing how customers use discounts, particularly during the checkout process, machine learning can identify patterns and behaviors indicative of discount code hunting or browser extension usage. This information can then be used to identify cohorts of users most likely to exploit discounts.
With this data at your disposal, you can estimate the number of suspicious users and orders, enabling you to calculate potential losses accurately. This insight is invaluable for planning future discount strategies and ensuring the financial health of your business.
