Not Every Customer Is Honest: 3 Ways to Prevent Coupon Abuse

Not Every Customer Is Honest: 3 Ways to Prevent Coupon Abuse

Because coupons are essentially money, some dishonest customers are exploiting their weaknesses and causing massive losses to businesses. If you are wondering on how to control coupon fraud, read on.

Coupon codes are a popular method of attracting customers to a business. They are often distributed by affiliates who earn commissions in exchange for their services. However, the main shortcoming of the coupon system is its vulnerability to fraud. If unchecked, coupon abuse could have severe adverse effects on your profits, as well as your reputation.

Forms of Coupon Fraud

The most common forms of coupon abuse are:

Claiming unlinked products – coupons are usually linked to specific products. In this form of fraud, the client redeems an unrelated product using a coupon. For instance, the scammer may redeem a phone instead of a music player.

Redeeming a single-use coupon multiple times – coupons are meant to be used once. Here, the fraudsters create several copies of a single coupon and proceed to use it to redeem products.

Coupon modification – this involves the alteration of coupon data, such as its value, expiry date and in advanced cases, the barcode.

Counterfeit rings – some scammers generate several fake but redeemable coupons and place them on sale on online platforms.

How to Prevent Coupon Abuse

You can protect your business against the consequences of coupon abuse by observing the following practices.

Use Technology

There are several ways in which technology can help in preventing coupon abuse. First, it’s in the design of coupon receipts and codes. If you issue hardcopy coupons, you can greatly improve their security by integrating advanced features such as holograms and watermarks.  If they are online, you should not post them in easily shareable formats such as PDFs or word documents.

Additionally, technology can also assist with verifying the authenticity of coupon codes. Netverify offers the complete solution to establish customers’ identities whether the coupon presented by a client is valid or not. This can help you to easily identify fakes.

Tighten Registration Procedures

Scammers usually create new accounts each time they want to exploit a certain coupon code. Since most of these accounts require an email address, which is freely obtainable online, creating a fake account is not a difficult task. Phone numbers and free SMS services are in abundance on the internet, making it easier to circumvent the registration process.

The best way of regulating the creation of fake accounts is by linking a valid phone number to each unique account. The validity of the phone number can be proven by sending a one-time code that the user will use to login into their account. Once this is done, no other individual will be able to register an account using that number.

Limit the Coupons

Another way of controlling coupon abuse is by imposing limitations on them. For instance, you can limit the number of coupons available to each customer. You could also limit the validity period of the coupons to avoid overexploitation of your business. Lastly, you can also restrict coupons for use in specific locations.