The language mostly speaks for itself. When your small business offers a promotion and customers take advantage of it, it can cause your business to lose a lot of money.
49% of retailers have experienced an increase of Promotion Abuse online since 2020 a MasterCard study revealed.
So you built a website and started selling your products or services online. Best practices indicate that offering a new customer a discount will help grow your email list, and effectively turn them into a customer over time. The acquisition is low, so you offer "sign up for our emails and get 10% off your first order" promotion. What you don't consider is the lengths people will go through to save money. That same customer now sets up multiple email continue to get your "introductory offer". This promotion abuse results in your margins dropping.
Simlarly referring a friend promotions can also cut away at your bottom line. When customers use multiple email addresses to refer friends, the so called "friends" are getting the rewards or gifts.
Voucher abuse is when companies create simple codes and customers eventually crack the "code" to take advantage of more discounts then they are entitled to.
Promotion abuse is hard to identify and stop. The only control your small or medium sized business has is knowing the loop holes and establish limitations and strict rules.
Ofra Nissani
Toronto Small Business Coach
