The Dark Side of Coupon Extensions

Consumers today want deals, and coupon extensions are a hassle-free way to get them. Our estimate suggests over 10 percent of online shoppers use coupon extensions to save money when shopping online. 

Thanks to the shift in consumer preference to online shopping, eCommerce merchants are embracing coupon extensions as an important part of their coupon marketing strategy. By offering coupons, online businesses can address price-sensitive shoppers, boost engagement and drive sales.

While coupon extensions deliver immense benefits to shoppers, they can also cause a few problems for eCommerce merchants. 

In this article, we share three concerns that highlight the countereffect coupon extensions have on online businesses.

Coupon extensions are browser extensions shoppers install to find and apply coupon codes and cashback offers at checkout. It helps shoppers get the best deal possible and save money when they make a purchase. 

• 88% of consumers use coupons for shopping [*]
• 17% of online shoppers have a coupon-finding browser extension [*]
• 51% of consumers prefer getting coupons and discounts on their mobile devices [*]

They also help eCommerce merchants turn more visitors into buyers and increase the site’s conversion rates. Coupon extension providers such as Honey, Capital One Shopping, and Rakuten capture 82.64% of the market share.

While coupon extensions appear to position themselves as affiliate platforms to help merchants increase their online business, they actually do more harm than good.

Coupon Extensions Negatively Impact Ecommerce Websites

1. Coupon Extensions Act as Price Comparisons Tools

Many extensions that offer coupon codes also offer price comparisons. The same extensions that offer a coupon to visitors on the website also offer a price comparison of similar products from your competitor.

They motivate customers to click on them, redirecting to your competitor’s website to complete the purchase. A fair amount of conversion loss takes place because of competitors’ coupons being displayed to shoppers on your website.

2. Coupon Extensions Hurt Profit Margins

Coupon extensions offer shoppers discounts at the bottom of the sales funnel when they have filled their shopping cart and are ready to complete their purchase.

They don’t drive shoppers to your site and instead automatically inject codes at the checkout page where visitors have demonstrated a high intent to purchase. So, they are likely eroding profits on a sale you would have made anyway.

Coupon extensions often use cookie stuffing techniques to earn commissions. When a shopper reaches the check-out stage and applies a coupon code, extensions drop a cookie and take credit for the session.

This means your customer can come through social media, search, email, or other affiliate channels, and complete a purchase, yet the coupon extension at the end will claim a commission. It skews your marketing attribution data and you pay the wrong affiliates for sales.

Buyers with high-purchase intent aren’t necessarily looking for a deal on their order but are force-fed with discounts at the checkout. You end up paying a commission for an unsolicited coupon code and customer discount as well. 

3. Unauthorized Coupon Usage

Overpaying and handing out unearned discounts? That’s not what you want from a coupon affiliate marketing program. 

Extensions scrape coupon codes from an eCommerce website when users with extensions manually type codes at checkout. All coupon codes are then cataloged and made available to other shoppers.

Shoppers who haven’t earned a coupon (e.g. via email, newsletter subscription, etc.) will also have access to a range of current and archived codes via coupon extensions and use it to significantly reduce the AOV of their cart.

How Can Ecommerce Brands Manage Coupon Extensions?

You can go through a few manual and often time-consuming processes to stop your revenue losses. You can ask an extension to get the coupon codes off your website.

Another option is to create coupons with limited lifespans. By the time coupon extensions automatically inject them, they will have already expired. But an expired coupon may frustrate shoppers and increase their chances of abandonment and wrong coupon usage.

Also, with no visibility on the client-side problem, eCommerce merchants have no way to monitor or block competitor pop-ups from hurting conversion rates.

eCommerce merchants should be able to monitor and block some coupon extensions and allow others, based on their customized business needs and impact on the KPIs.

Using BrandLock Engage, you can stop coupon extensions from enabling coupon codes on your website. Engage recognizes when shoppers are using a coupon extension and stops them from interrupting the online customer experience. It also replaces coupon codes with one-to-one messaging to drive more engagement and sales.

BrandLock’s coupon extension management approach helps eCommerce businesses:

• Stop paying commission fees for unauthorized coupons and grow your bottom line.
• Remove distraction causing price comparisons from hijacking your customer journey.
• Offer alternate deals that are more effective and protect your profit margins.

By eliminating coupon extensions you stop paying unfair commissions and protect your margins. The solution also pin-points price-sensitive shoppers and ensures they convert using the right offer.

Prevent coupon extensions from burning a hole in your margins. Find out how.

Melissa Rodrigues

Melissa is the head of marketing at BrandLock. She is passionate about digital marketing and has worked with enterprise and growing technology companies to build their online marketing communications and branding programs.