Thursday, May 9, 2024

Coupon Codes & The Conundrum Of Internet Couponing

Do coupon codes generate sales or just cut into profits?

Whenever you buy something online, it seems, you are prompted to apply a "coupon code" to get a discount.  If you have bought from a merchant before and got on their mailing list, sometimes they will send you these codes.  "Buy again right now! Use coupon code SPRING15 to save 15%!"  And indeed, you may have consented to their mailing list previously in order to get some other coupon code discount.

There are also sites on the internet that claim to have coupon codes for you to use.  Most of these are bogus.  "Coupon code for for 75% off!" one crows.  But of course, no merchant is offering 75% off - or if they are, they are a crummy merchant.

Most of these "Coupon code" sites tease you with the codes, and you have to click on them to reveal the code.  Clicking on the code opens a new tab for the merchant in question, and the coupon code site gets a small referral fee.  Not a few months ago, it seems, some of these coupon codes were valid, but today, most are bogus.  "Free shipping!" one coupon "code" reveals - but that is the default offer for everyone on that merchant site.

I also noticed a funny thing on some sites - while the coupon code of "SPRING15" saved 15% on my purchase, the code SPRING20 (which was not advertised) saved 20%.

But lately, I am finding that merchants are not using such obvious codes and moreover, most of the codes touted on coupon code aggregators are invalid, even if they claim "recent use" and "90% success rate" for a code. In short, most of these coupon code sites are trash.

And this is not unexpected.  If you can scrape a few pennies from a website referral (as these coupon code sites are doing) then you need not supply real codes but just have an AI bot gin up some fake ones.  If the customer buys through the tab the site opened, they get a referral fee.  Profit.

For the actual merchant, well, there is no point in letting people use coupon codes willy-nilly.  The problem with electronic couponing has always been the windfall effect.  You want to use coupons to alter consumer behavior - induce them to spend, induce brand loyalty, induce repeat purchases.  If a customer was going to buy anyway at full price and then gets 15% off by googling "coupon codes for" then the merchant is missing out on maximized profits.

I wonder, sometimes, if a clever IT person has programmed the checkout to deny all coupon codes if the buyer tries to enter more than, say, two or three.  If a buyer tries a number of coupon codes, they are not seeking a discount they are entitled to, but merely fishing.

Getting a coupon discount is nice and all, but I prefer to shop based on everyday low prices.  When I see a merchant offering lower prices to other people but not to me, it makes me think two things.  First, their prices are way too high if they can offer 15% off without blinking.  Second, maybe I don't need to buy from that merchant, but should shop around.

Or just decide not to consume at all.

Because in the time I spent dicking around with coupon code sites, I realized that whatever it is I was going to buy, I really didn't need or want.  So maybe coupon codes serve a purpose after all!