Promo Code & Coupon Monitoring in Affiliate Marketing [Tips]

Understanding Promo [Coupon] Code Abuse:

What is coupon code abuse?

When it comes to coupon abuse, we’re talking about when promotional codes get misused or mishandled.

This can be someone overusing a code meant for a single purchase, sharing exclusive discounts without permission, or even sites promoting outdated or unauthorized deals. It's a headache for brands, affects their earnings, and can lead to disappointed customers.

[Hypothetical] Example Scenario of Coupon Code Abuse for a Brand:

Brand: LuxeTech, a high-end tech accessories company.

Promotion: LuxeTech partners with an Instagram influencer, @TechGuru, to promote their newest line of wireless earbuds. As part of the collaboration, @TechGuru's followers receive an exclusive 20% discount using the code "TECHGURU20", valid for one purchase per customer.

Abuse Scenario:

• A user discovers that the code can be applied more than once by creating multiple accounts or using different email IDs.
• They share this loophole on a popular deals forum.
• Soon, a surge of orders comes in, all using the "TECHGURU20" code multiple times.
• LuxeTech faces not only a loss in expected revenues but also a potential inventory shortage and strained relations with other customers who couldn't benefit from the deal.

Common Methods of Promo Code Abuse:

Unfortunately, there are a lot of ways in which people can abuse promo codes.

Below are some of the most common methods we’ve seen, but of course, there are always other ways not listed you’ll need to pay close attention to.

1. Multiple Account Creation.

• Issue: Users create several accounts to repeatedly benefit from "first-time user" or "welcome" discounts.

• Why It's a Problem: This inflates the number of "new" customers, skewing data on customer acquisition. It also means brands are giving away more discounts than they intended, impacting revenues.

2. Code Harvesting.

• Issue: Individuals or websites gather and publicize a variety of codes, including those meant to be exclusive or for one-time use.

• Why It's a Problem: Brands lose control over how and where their promotions are distributed. This could also lead to oversaturation of discounts, diminishing the perceived value of the brand's products.

3. Code Stacking.

• Issue: Users exploit vulnerabilities in a system that allows them to use multiple promo codes on a single order.

• Why It's a Problem: This can result in excessively discounted orders, sometimes even leading to situations where the brand is at a loss with the sale.

4. Share and Spread.

• Issue: Exclusive codes designed for specific individuals or groups are shared widely on social media or discount forums.

• Why It's a Problem: Brands might face over-redemption, which wasn't budgeted for. The exclusivity of promotions is lost, which can upset the intended recipients.

5. Expired Code Use.

• Issue: Due to system glitches or oversight, some expired codes remain valid and are usable.

• Why It's a Problem: This can disrupt inventory planning and revenue forecasting, as brands might end up giving more discounts than they planned.

6. Automated Bot Use.

• Issue: Bots are deployed to rapidly test a vast array of potential codes until they find one that works.

• Why It's a Problem: These unauthorized redemptions increase operational costs. They also hog website bandwidth, potentially slowing down the site for genuine users.

How to Monitor and Protect Against Promo Code Abuse:

Now it’s time to protect your brand.

No matter whether you’re a small business owner or multinational brand, below are ways you can protect and monitor promo code abuse.

We’ll share what each of these are, and how this strategy can be effective for your business.

Okay, let’s jump into #1!

1. Unique Code Generation.

Instead of general codes, generate unique, one-time-use codes for each promotion or user.

Priceline does a fantastic job at this for their loyalty program. They provide a one-time, unique code to receive discounts on Express Hotel deals.

• Why It's Effective: By ensuring each code is unique and can be used only once, you significantly reduce the risk of widespread unauthorized sharing or multiple redemptions.

2. Implement Rate Limiting.

Place limits on how frequently promo codes can be tried from a single IP address or user account in a given timeframe.

• Why It's Effective: This thwarts automated bots and individuals from continuously guessing or trying out a multitude of codes.

3. Geo-Restrictions.

To limit redemptions in certain areas, use geo-restrictions for region-specific promotions.

• Why It's Effective: This ensures only the intended audience can access the promo and curbs misuse from regions where the promotion isn't advertised.

4. Monitor Redemption Patterns.

To track abnormal patterns, like sudden spikes in redemptions or multiple uses from similar IP ranges, use analytics.

• Why It's Effective: Identifying and responding to anomalies swiftly can help stop abuse in its tracks and highlight potential vulnerabilities.

5. Time-Bound Promo Codes.

Set expiration dates for promo codes to ensure they're only valid for the intended promotion period.

Below is an example of Sperry’s email promotion offering up 30% across their site, but they’ve put a time limit on the coupon code.

• Why It's Effective: This limits the window of opportunity for misuse and ensures that promotions are timely and relevant. This always drives urgency in purchasing decision for consumers.

6. Strict Account Verification.

To get special promotions or first-time user discounts, you need to have a verified email address or phone number.

• Why It's Effective: This creates a minor barrier for those attempting to game the system with multiple account creations.

7. Educate Partners and Affiliates.

Make sure that everyone distributing promo codes knows the terms of use. This is especially important when it comes to your affiliate partners.

As you’ll see below, there are hundreds of publishers promoting “Wayfair coupon codes”, but Wayfair rarely offers these types of coupons.

These affiliates are poaching on high-converting affiliate tracking, and depending on the publisher, may have hidden they were a coupon affiliate to the brand.

• Why It's Effective: A well-informed partner is less likely to unintentionally encourage misuse, ensuring that the promo code's distribution aligns with the brand's intentions.

8. Implement Promo Code Tracking.

To keep track of where your codes are shared and discussed, use tracking systems. Pay special attention to unauthorized forums or websites.

Below you’ll see Reddit threads where people are posting about Wayfair promo codes. It’s best to measure these types of sites in case there has in fact been a coupon code leak.

• Why It's Effective: By keeping an eye on where your codes surface, you can quickly act to remove unauthorized postings or adjust the promotion if it's being widely misused.

9. Regularly Review and Update Systems.

Regularly check and update your promo code system to patch any vulnerabilities and adapt to new abuse tactics.

• Why It's Effective: Continual system reviews ensure that you're always a step ahead of potential abusers, keeping your promotions secure and effective.

10. Affiliate/Influencer Network Software

Use affiliate software to manage, distribute, and track promo codes for influencers or affiliates.

Here are some of our recommended affiliate software that can help manage coupons:

1. Phonexa
2. Trackdesk
3. Rewardful
4. Reditus
5. Upfluence
6. Everflow
7. UpPromote: Affiliate & Referral
8. Impact
9. PartnerStack‎
10. Affise
11. Post Affiliate Pro
12. Tapfiliate
13. FirstPromoter
14. CJ Affiliate

Why It's Effective: Provides a centralized system with built-in safeguards, ensuring codes are used as intended.

11. 3rd Party Coupon Tracking Software

To keep track of promo code usage, use software from another company that monitors how codes are given out and used on different platforms.

Here are a few coupon tracking software we recommend:

1. Talon.One
2. Impact
3. Coupon Carrier
4. Voucherify

Why It's Effective: Offers a broader view of code distribution, enabling you to spot irregularities or unauthorized sharing across multiple platforms.

Tips for Dealing with Identified Abuse:

Stumbling upon a case of promo code abuse can feel like quite the kick in the gut.

I've been there, and let me tell you, it's not fun.

Based on my experience, I’d say some of these below tips will help you

1. Swiftly Revoke the Code:

As soon as abuse is detected, revoke the problematic code immediately to stop further misuse. This ensures minimal continued financial impact and disrupts the abuser's operations.

2. Communicate with the User:

Reach out to the individual or entity misusing the code, informing them of the misconduct and any consequent actions. This establishes that your brand is vigilant and can deter potential future abuses.

3. Blacklist Repeat Offenders:

If particular users or IP addresses consistently abuse codes, consider blacklisting them. This can significantly reduce recurrent abuse from known trouble sources.

4. Audit System Vulnerabilities:

Conduct a thorough review of the platform or system to understand how the abuse occurred. Identifying weak points allows for reinforcement against future exploitation.

5. Strengthen Code Distribution:

If certain partners or affiliates repeatedly share codes improperly, reconsider how you distribute codes to them or if they should receive them at all. To prevent misuse, only trusted entities receive promo codes.

6. Public Transparency (If Needed):

If the abuse is widespread and public, consider issuing a statement to clarify the situation and actions taken. This maintains public trust by showing proactive management and accountability.

7. Update Terms & Conditions:

Ensure that your terms of service or usage policies clearly define promo code misuse and associated penalties. Clear guidelines provide a foundation for action and deter potential abusers.

8. Regular Monitoring:

Keep consistent surveillance on promo code usage patterns. Early detection of any irregularities allows for quicker response and mitigation.

9. Educate Partners and Customers:

Regularly remind your partners and customers about the correct use of promo codes. Education can reduce unintentional misuse and set clear expectations.

10. Feedback Loop:

Create a system where partners, affiliates, and even customers can report observed abuse or share feedback. This crowdsources vigilance, multiplying the eyes and ears attentive to potential abuse.

Wrapping up Coupon Code Monitoring

Using promo codes incorrectly in partner marketing is not a small problem. This challenge can harm profits, disrupt marketing data, and strain relationships with partners and customers.

But, as we've delved into, it's a challenge that can be met head-on.

Brands can reduce risks and protect their campaigns by monitoring and responding quickly to abuse.

We must remember that the digital world is always changing, including the tactics of its exploiters.

Brands must stay alert, update systems, and communicate openly to benefit from promo codes.

In partner marketing, as in all business endeavors, forewarned is forearmed.

To increase engagement and growth, learn, use tools, and apply strategies with your promo codes.