Author’s Note: Coupon glittering typically refers to the exploitation of glitches associated with coupons used at brick-and-mortar stores. However, online retailers should take note of the techniques used by online glittering communities. Online fraudsters can similarly take advantage of loopholes in discount and promo codes offered and share exploits within these online forums.
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Coupons are an effective revenue tool for retailers all over the world. By discounting products through coupons, businesses can encourage customer loyalty and provide a positive customer experience that saves people money.
However, coupons have an uglier side, as bad actors can exploit them. Moreover, as customers have grown savvier in using coupons, they have started to uncover illegitimate means of making money from them.
Research has shownthat coupon fraud costs retailers more than $100 million annually. Unfortunately, it’s a type ofpayment fraudthat some business owners may not know much about, as it can be hard to catch. Coupon glittering is just one of many methods fraudsters can employ to exploit coupons offered by a business.
What is coupon glittering?
Coupon glittering is when users exploit an error in coupon creation to purchase items at a discount. Glittering is another word for glitching and occurs with incorrectly created coupons.
For example, a retailer issues a coupon for $100 off an outdoor furniture set. However, an error in the coupon’s creation failed to prevent it from being used on other items. Coupon glittering occurs when a customer uses the coupon to purchase a $100 deck chair and pays nothing for it.
Coupon glittering can be accidental, or it can be deliberate. There are even online communities of shoppers who spread information about these exploited coupons.
More commonly used at brick-and-mortar stores, coupon glittering can also occur online. Online retailers should be aware of the methods used by coupon glittering communities to protect any online discount codes they may offer.
What are the different types of coupon glittering techniques?
1. Copying coupons
Customers occasionally attempt to make copies of coupons to cash in on a particularly great deal. However, it becomes a much bigger problem when they make copies of coupons that they know have glitches.
For example, a customer may be alerted that an issued coupon is valid on other products. Instead of just using the coupon once for a purchase, they make multiple copies of the original voucher and attempt to use them for various products.
Most brick-and-mortar retailers don’t accept copies of coupons, but some do. So it’s essential to ensure you’re only honoring the original version.
2. Trading, buying, or selling coupons
It’s not unusual for family members or friends to give coupons to each other, especially when they know someone interested in purchasing the item promoted. These trades are generally acceptable, and businesses have few options to prevent this.
However, it becomes coupon fraud when people knowingly buy, sell, or trade coupons to utilize in a glittering scam. As a retailer, it can be hard to tell if a customer has purchased or obtained a coupon in non-acceptable ways.
3. Decoding coupons
Decoding coupons refers to the barcode number associated with a specific paper or printable coupon. It is unique to the particular barcode and signifies the amount of the discount it contains and the applicable products.
Some people with a genuine interest in coupons can decode coupons to understand their discounts or promotion. Still, this technique is commonly used to identify easily exploited ones. The average consumer wouldn’t know the difference between a coupon possibly able to be used in a glittering scam and one that isn’t. A fraudster can decode coupons in advance to identify which ones have glitches.
4. Coupon modification
A customer who can decode coupons can not only identify ones with glitches but can also use that knowledge to modify otherwise secure coupons.
By understanding coupon codes and what different codes allow coupons to do, they can essentially create fake coupons out of legitimate ones.
For example, a specific section of the coupon barcode represents the promoted item. Say that is represented by the code number 33. However, a fraudster may realize the number can change to 88 and will allow the coupon to be used on another item.
How does coupon glittering harm businesses?
Glitter couponing essentially allows fraudsters to steal from an unsuspecting business.
Taking the outdoor furniture example from before, a retailer can afford to offer $100 off that outdoor furniture set because it’s only a fraction of the furniture’s price. Let’s say it’s worth $1,000, meaning the coupon represents a 10% discount. However, someone in a glittering coupon scam uses that coupon on the $100 deck chair. That’s 100% of the price of that item. So they would get that deck chair for free.
You would never issue a voucher that allows a customer to get anything for free. But unfortunately, that is what can happen if a fraudster manages to “glitter” your coupons.
How can businesses protect themselves from coupon glittering?
1. Check the source of coupons used.
Coupon fraudsters are more than capable of making fake coupons. They use the layout of your recent coupons to replicate them, then recode them for new products and discounts.
Remember, your business is the only legitimate source of your coupons. That means you know better than anyone the limitations of each coupon. Ensure there is employee training to recognize fake coupons. Also, employees should have access to a list of currently active coupons to cross-check when a customer attempts to redeem something unfamiliar.
2. Always check the expiration date of coupons.
If a customer presents a coupon that’s out of date, there’s every chance it’s an accident. Sometimes expiry dates aren’t precise, or they may not even realize your coupon has expired.
However, they may try their luck because they know the coupon glitches. Unfortunately, it’s effortless to hide a scam behind a claim of not knowing, and it’s hard to prove if you think it may have been deliberate.
However, you can reduce mistakes by making it a standard operating procedure for staff to check the expiration date of all coupons they accept. Expiry dates are a normal part of coupon use, and you should only validate coupons over the period they’re valid.
3. Set up prevention protocols
You can introduce a range of protocols to prevent your customers from using fraudulent coupons.
- Monitor social media and glitching groups to know when your coupons are discussed.
- Only issue coupons for one specific product and timeframe, so staff knows their validity and when.
- Put a cap on the maximum dollar value that cashiers can override using coupons.
- Conduct thorough testing of your coupon booking systems to limit the chances of producing glitter-able coupons.
- Monitor each instance of coupon use. You may not prevent one-off glitches, but this will enable you to identify systemic glittering before it becomes a much larger problem.
4. Switch to digital coupons
Digital coupons are harder to replicate and modify, which can go a long way to preventing coupon glittering.
You can also personalize your digital coupons for specific audiences, allowing you to verify a customer’s ID when they present coupons. Even if that customer spots a glitch in your coupon, they’re less likely to try and defraud you if you know who they are.
Digital coupons are also easy to void when the period of your sale ends. However, because they’re redeemed digitally, you can avoid human error by simply updating your systems to identify and reject old coupon codes automatically.
5. Provide employee training to spot coupon glittering
Your employees are the ones on the front lines of your defense against coupon misuse, so it’s essential to take the time to train them to detect it.They should know what coupons are in the market anytime, so they don’t accept expired coupons.
You can also teach them the importance of checking coupons that customers present to them to ensure their validity. It can be easy for a cashier to go into auto-pilot and not realize that they’re processing a glittering scam. You can encourage vigilance and alertness and help them to understand how damaging glittering can be to your business.
Coupon glittering is a highly organized form of fraud targeting brick-and-mortar stores. It involves people actively looking for coupons with glitches they can exploit.
The thing is, coupons can be very effective marketing tools, so many businesses want to be able to continue using them despite the risks. You can mitigate the associated risks with thoughtful employee training and fraud detection processes.
Coupon glittering is the umbrella term for using coupons, promo codes, or discounts in a way they weren't meant to be used. It means searching for loopholes or glitches in how coupons are programmed to take unfair advantage of them.How do coupons affect businesses? ›
Coupons can help introduce new product lines and encourage customers to try a more profitable brand or service. Coupons can also help attract existing customers to come back to your store. The biggest con of using coupons is that they cost businesses money and may lead to lower profit for that sale.How can using coupons for promotion be a problem? ›
Drawbacks of discounts and coupons
They can lower your profit margins, devalue your brand, and reduce customer satisfaction. They can also train your customers to wait for discounts and coupons, which can hurt your regular sales and pricing strategy.
Yes, because it's not illegal to buy coupons from a legitimate coupon clipping service that charges for clipping the coupons. Selling coupons is a violation of the “non-transferability clause” fine printed on every coupon.Is it illegal to make multiple accounts for discounts? ›
Technically the act itself is not illegal, unless using another REAL persons identity, however many businesses will state that multi accounting is a direct violation of their terms and conditions.Do stores get reimbursed for coupons? ›
The manufacturer might reimburse the clearinghouse for the amount of the invoice, and the clearinghouse will send a check to the store for the amount of the coupons. Or the manufacturer will send a check directly to the store and the store then pays the clearinghouse.How do discounts affect customers? ›
Lowering the perceived quality of your brand
Discounting, in the form of lowered prices, can also have a negative effect on how consumers perceive your products and brand. The price-quality heuristic is one that we all know; higher prices represent higher quality.
Consumers pointedly look for and use coupons to save on their purchases, and businesses benefit from offering coupons from helping to build brand loyalty to encouraging repeat business from consumers.What affects coupon rate? ›
A bond issuer decides on the coupon rate based on prevalent market interest rates, among others, at the time of the issuance. Market interest rates change over time and as they move lower or higher than a bond's coupon rate, the value of the bond increases or decreases, respectively.Do companies lose money on promotions? ›
Up to 75% of brands are left in the red at the end of their promotional campaigns. Statistically speaking, chances are you're part of the 75% of brands who lose money on trade promotions.
It Eats Up Your Time. Although clipping a coupon here and there doesn't take much effort, if you're truly committed to saving, you're going to have to invest your time. Some of the extreme couponers spend more hours each week sifting through newspapers, ad sections, and online sites than they spend working at their job ...What is one big disadvantage of sales promotion? ›
Increased Sensitivity to Price: Customers are more sensitive and will hunt for discounts. Customers often wait for the specific product to go on sale again. If a company offers a promotional value for some products and then raises the price, it slows sales on regular days.What is coupon misuse? ›
Coupon fraud is the use of fake coupons, or the misuse of actual coupons, to derive more value from a promotion than someone would usually be entitled to. This can include using a coupon multiple times, changing its value or expiration date, or redeeming it for the wrong (or even no) product.Does a company have to honor a coupon? ›
Generally, honesty and good faith will ensure that none of these rules are violated. Retailers are under no legal obligation to accept coupons. This does not mean that a merchant should issue as many coupons as he likes with no intent to honor them.Do companies make money from coupons? ›
However, like most “sexy” business models, turning a profit on a coupon site is a lot harder than most people assume. Coupon sites make 99% of their money off of advertising revenue and affiliate commissions. A coupon site needs A LOT of traffic to be profitable.How do you tell if a coupon is photocopied? ›
Each printable coupon has its own unique # on it. Look at the image above – the numbers next to the red arrows need to be all different if you have multiple printable coupons of the same product. If the numbers are the same, then you are scamming the system and its like using counterfeit money.Why is a face called a coupon? ›
As the next most common thing likely to be punched in the city was someone's face, over time punch your coupon (in) in reference to your tram tickets entered Glasgow slang to refer to a punch in the face by someone. As a result, coupon substituted face. So there you have it!What is a unicorn in couponing? ›
These names also attract new users by sounding harmless. “Unicorn” is a coupon term that's grown in popularity over the past year, and it refers to a high-value coupon that doesn't exist in the real world. It's a counterfeit.Is extreme couponing fake? ›
We definitely made a poor decision by participating in the show." One participant in "Extreme Couponing" blogged about her experience after the filming, saying, "The entire show is scripted. The producer handed us coupons to give them and told us what to say. Totally fake.