How to Protect Yourself From Coupon Fraud and Abuse

Jonathan Halbrecht - Co-Founder and Chief Product Officer at Blyp
By Jonathan Halbrecht
Joel Taylor
Reviewed by Joel Taylor

Published July 21, 2022.

Hands holding plain white mask surrounded by holographic image of the world

The purpose of this article is to provide information on how to protect yourself from coupon fraud and abuse. Specifically, we will discuss the different types of coupon fraud and how to avoid them. It is important to be aware of these scams in order to protect your hard-earned money.

What Is Coupon Fraud and Abuse?

Coupon fraud is a form of white-collar crime that involves the illegal use of coupons in order to receive a discount on goods or services. Coupon fraud can involve the use of counterfeit, stolen, or fake coupons, or the alteration of legitimate coupons in order to receive a greater discount than was intended. Coupon fraud is considered a form of theft and can result in significant financial losses for businesses.

Types of Coupon Fraud

Coupon fraud comes in many shapes and sizes, but all have the same goal in mind: to take advantage of a brand’s discounting system. Here are a few of the most common types:

  1. Duplicate Coupons This is probably the most common type of coupon fraud. It happens when someone tries to use more than one coupon on a single item. Oftentimes, they will try to use a manufacturer's coupon and a store coupon on the same item, or multiple copies of the same coupon.
  2. Fake Coupons Sometimes scammers will create fake coupons in an attempt to get something for free. These coupons may be for a product that doesn't exist, or for a higher value than the product is actually worth. They may also be expired or not valid at all stores.
  3. Float abuse This happens when people buy items just to get the coupons attached to them, and then return the items for a full refund.
  4. Stolen coupons Stolen coupon abuse is the misuse of a coupon that has been stolen from its rightful owner. This can include using the coupon to purchase something when the coupon was not intended for that purchase, or selling the coupon for profit.

How to Protect Yourself From Coupon Fraud

Online businesses can protect themselves from coupon fraud by implementing a few simple security measures.

1. Make Use of Hard-To-Crack Codes

Online businesses can protect themselves from coupon fraud by generating hard-to-crack codes. These codes can be used to verify the authenticity of a coupon before it is redeemed, helping to prevent scammers from using invalid or stolen coupons.

2. Use Customer Unique Codes

Businesses can protect themselves from coupon fraud by assigning unique codes to single customer profiles. This will help to ensure that only the intended customer is able to redeem the coupon.

3. Assign a Finite Number of Coupon Redemptions

Another way businesses can protect themselves from coupon fraud is by limiting the number of redemptions. This will help to ensure that only legitimate customers are able to redeem the coupons and that fraudsters are unable to take advantage of the promotion.

4. Safeguard Your Digital Offers With Email Verification

Customer email address verification is another way online merchants can protect themselves before sending any digital offers. This can be done with a simple email verification process, which takes only a few seconds to complete. Once the email address has been verified, the business can send the customer the digital offer and be confident that it will reach its intended destination.

5. Detect Suspicious Behavior With Behavioral Analytics

Online businesses can protect themselves from coupon fraud by investing in behavioral analytics. This will help them detect suspicious activity in a number of ways, such as tracking link clicks or multiple coupons being used from the same IP address.

6. Generate Geo-Located Coupons

Coupon fraud can also be protected against by creating geo-located coupons. This means that the coupons can only be used in certain areas, and customers must provide proof of location before using the coupon. This helps prevent people from using the coupons fraudulently, and it also helps to ensure that customers are actually near the business when they use the coupon.

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