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Offering Coupons are a simple loss for Online Businesses


Coupon marketing has been an effective business strategy to multiply sales and increase conversion rates. Coupons aid marketers in increasing market share, sales volume, speed of sale, consumer loyalty development, and obliteration of rival advertising. Coupons may persuade customers to buy products again.


However, if you solely rely on being cheaper than other brands for your sales, you might face losses in your business. Unless you have a unique product at an exceptionally low price, you won’t be getting much profit. Here, we will be discussing how coupon marketing strategies can fail your business.

How do coupons affect businesses negatively?

The major drawback of employing coupons is that they are expensive for your business. Any discount you give will result in you keeping less money.


Coupons may cause a reduction in profit on the product or products covered by the coupon campaign, but the price of making the product will remain the same. Because of this, it’s crucial to consider the value of a coupon promotion for the company and if the discount will generate enough new sales income in the long run to cover the campaign’s expenses. Many coupon websites like RetailMeNot and ClothingRIC take advantage of this situation.

Drawbacks of coupon promotion if imparted partially:

Coupon marketing is only effective if implanted rightly. Impartial coupon marketing will not only fail the campaign, but also result in negative losses for your business. According to research data, coupons might increase sales, but even your regular customers will wait for coupons and won’t make a purchase unless you provide a discount. In this way, poorly implemented coupon promotion will result in more drawbacks than profits.

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if you solely rely on being cheaper than other brands for your sales, you might face losses in your business.

Prevention of Coupon abuse:

Coupon abuse or fraud occurs when someone exploits a business’s coupons for personal gains. If not kept in check, coupon abusers can use single coupons multiple times, create fake coupons, or sell coupons at higher prices or for valuable favours and services. Coupon fraud and abuse cause a loss of millions of dollars annually. You can prevent coupon abuse by doing the following:


  • Implement a method that is clear and simple to track coupon usage.
  • Limit the number of coupons and the promotion’s duration.
  • Make up special promo codes and provide them to special customers.
  • Don’t overly encourage cart abandoners.
  • Apply location targeting on coupon use.
  • Have control over how your coupons are used.
  • Never completely reveal your promo code’s restrictions.
  • Compare suppliers and joint venture partners.

Discounting Destroy business profits:

Unlike selling at a discount, your margins are better when selling a good or service at full price. You’ll need to sell more to make up for the profit margin you lose by discounting, since you’ll need to do so with upcoming opportunities.


Discounts will do more than just eliminate your profitability and cash flow. Everything leads directly to the conclusion. The attitude of “I’d rather get the cash flow in the door” is shared by many people. This is not a viable, long-term option. Even a minor margin hit will be detrimental, since the top-line change significantly influences the bottom line.

Stop losing money on discounts:

A discount runs the risk of reducing your profit margin too much to justify the transaction. The key to a successful voucher marketing campaign is maintaining profits while offering discounts to your customers. You can do so by:


  • Utilise low-cost strategies to keep your marketing budget in check, including advertising to email lists or social media followers.
  • To reduce the cost, you lose on reduced sales and restrict your offer to specific demographics like first-time purchasers or dormant clients.
  • Bundling discounted products with full-priced items or offering full-priced upsells will increase the money made per reduced purchase.
  • Increase sales activity by comparing the number of sales required to reach a goal of revenue at your present margins vs. the number required at your discounted margin; increase marketing effort proportionally.

When coupons decrease sales:

It is common knowledge that coupons usually increase sales and conversion rates. However, sometimes, too much coupon marketing can reduce your sales. You put the reputation and quality of your service at risk, and it may come off as cheap. You risk engaging in a pricing conflict with the competitors and being perceived as a commodity.

New customer discounts, profitable or not?

Most online and retail businesses offer First-time buyers or new customer discounts. First-time buyer discounts may bring new customers to the store, but there is no guarantee that these new buyers will stay as regular customers. This scheme has no sustainability, as people will leave once they have received a one-time discount. Many people avail of multiple discounts by creating accounts from different IDs.

Offering discount at the wrong time:

An effective coupon marketing strategy involves giving discounts and coupons timely. You must have experienced that most businesses offer discounts before the season starts or when the demand is high. If you offer discounts when the sales are too low, you will sell your products at a lesser price resulting in a loss. That’s why it is important that you give out coupons when you are sure that they will bring maximum profits.


Coupons may attract customers to your store and aid in the development of a discount marketing strategy to raise your average sales per customer or long-term recurring business. Coupons also draw customers to your more lucrative goods and services. However, the increased revenue from a coupon campaign must be compared against the costs of the discount or the reduced profit per product from both new and current consumers.

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