How to Guarantee Coupon Security: 4 Tactics

Don’t be a victim of fraud of coupon misuse.

When you were a little kid, did you ever make special coupons and give them to your parents? You just had to draw ‘Valid for 1 free car wash!’ on a piece of paper and BAM, you had the perfect birthday present for Mom or Dad.

But you are not five anymore and your marketing strategy involves running a coupon campaign targeting thousands of customers online.

Coupons are proven to be an incredibly effective marketing strategy. In a recent survey, more than 70% of US internet users said their purchases were influenced by coupons and discounts (eMarketer, 2016). But before you unintentionally give all your customers 50€ coupons, there are a some key security features you should consider.

“More than 70% of US internet users said their purchases were influenced by coupons and discounts(eMarketer, 2016).”

We don’t want to scare you, but when set up incorrectly, coupons can easily fall victim to fraud, abuse or lead to a major loss in revenue.

Today we will discuss four effective ways to guarantee coupon code security and how to turn that five year old kid into a promotional marketing expert. For this article we will discuss promotions for a car wash business, but keep in mind these tactics can be applied to any business, in any industry, that wants to use coupons for their promotion marketing.

1. Ensure secure coupon validation is in place

The example: You want to give a 5€ coupon to car owners who clicked a Facebook link (including UTM parameters), valid when they have a total cart value of 50€

  • The coupon rules in place here include user profile information, UTM parameters and cart value. Remember the coupon should only be valid for car wash customers who fulfill all of these conditions.
  • If each rule is not validated correctly, you might end up giving every customer 5€ for free (not a good strategy, but a good way to lose a lot of money).
  • Ensure the promotion tool you are using is powerful enough to correctly validate your rules, create a secure coupon code, then execute the right reward, delivering the right coupon to the right person.

2. Set up necessary redemption limits for the coupon and customer

The example: You want to to give new customers who sign up for your newsletter a special coupon code granting them five free car washes.

  • There are several limits that should be considered for this type use case (and for any coupon) such as code redemption limits, customer limits and campaign limits.
  • Be sure to limit the number of redemptions possible for each individual coupon code. For this example, you don’t want customers sending the coupon to all their friends and giving away 5 free car washes to everyone on the internet.
  • In terms of individual customer limits, define how many times they can redeem a coupon code. Typically this will be set to one per customer and the limit should be based on something unique like a customer profile, ID or email.
  • At the campaign level, set a total cap to control how many coupons are given away or the total amount of customers who can take advantage of this particular coupon code. This could also be unlimited, but be sure you have an expiry date or another rule in place define the “end” the campaign.

3. Define a secure code structure

The example: You want to reward customers for their 10th purchase on your website with a 20€ code to use for their next car wash and service (this is a really high quality car washing company).

  • Codes should have a secure code length be between 4 and 20 characters long to avoid the chance of someone systematically guessing the code. If you are using Talon.One, our coupon settings calculate the chances of someone guessing your code to maximize code security.
  • Not saying your customers are evil, but sadly there are some people (or maybe bots?) who try to guess your code.
  • You can customize your code or have a set of numbers, letters, or a mix of both. Either way, be sure to have the right code validation in place for optimal security.

4. Set the timeframe and/or expiry date for the coupon code

The example: You run a promotion giving customers 50% off their next car wash and polish if they use the code SUMMER-2017 within the next 72hours

  • The whole campaign is time-sensitive, but please remember to set the exact expiration date and expiration time of your coupon code. You want to avoid customer taking advantage of this sale by redeeming the code over and over for the entire summer - this is a huge revenue loss.
  • If you issue codes that are not valid or have expired, this will cause problems for your support team and cause major customer dissatisfaction. If you launch a marketing campaign with coupon codes, be certain the codes are ready and valid while the campaign is in market.
  • Setting the start and end dates for a particular coupon code is another very very important step in the validation process to ensure code security.

No matter what industry you are in, there is no doubt that coupons are an effective marketing tactic. In 2014, it was estimated that 16 billion eCoupons were used and projections show that an estimated 31 billion eCoupons will be used in 2019 (Invesp, 2016). So if you aren’t sending coupons yet, they will probably be part of your promotion marketing strategy very soon.

“Projections show that an estimated 31 billion eCoupons will be used in 2019 (Invesp, 2016).”

So you are not five years old anymore, but that should not stop you from creating a coupon campaign. Just remember, if the coupon campaign is not set up correctly, you have to deal with issues like with code validation, potential fraud, wasted revenue and wasted resources.

To avoid these problems, it is essential to have a proper solution in place for managing, creating and validating your coupon campaigns. Be sure your solution has logical checks in place to ensure all rewards are carried out effectively and you avoid wasting your promotional budget. We would love to answer any questions you might have about coupon and promotion campaign security, just get in touch.

What is your experience with coupons and code security? Have you been a victim of code abuse or fraud? Let us know your experience, good or bad!

This post originally appeared on the Talon.One Blog: How to Guarantee Coupon Code Security.

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