What is coupon glittering & how can it harm your business?

November 2, 2021
November 2, 2021
What is coupon glittering?

Author’s Note: While coupon glittering typically refers to the exploitation of glitches associated with coupons used at brick-and-mortar stores, online retailers should take note of the techniques used by online glittering communities. Online fraudsters can similarly take advantage of loopholes in discount and promo codes offered, and share exploits within these online forums.

FingerprintJS helps e-commerce sites prevent promo and coupon fraud by uniquely identifying each visitor to your website, making it easy to catch suspicious user behavior. Learn more about how we protect e-commerce sites.

Introduction

Coupons are an effective revenue tool for retailers all over the world. By discounting products through coupons, businesses can encourage customer loyalty and provide a positive customer experience that saves people money.

However, there is an uglier side to coupons, as they can be exploited. As customers have grown savvier in the way they use coupons, they have started to uncover illegitimate means of making money from them.

Research has shown coupon fraud costs retailers more than $100 million each year. It’s a type of payment fraud that some business owners may not know much about, as it can be hard to catch. Coupon glittering is just one of many methods fraudsters can employ to exploit coupons offered by a business.

What is coupon glittering?

Coupon glittering is when users exploit an error in the way the coupon has been made to use it on products that it wasn’t intended for. Glittering is another word for glitching, and it’s made possible when coupons aren’t coded properly.

For example, say a retailer issues a coupon for $100 off a set of outdoor furniture. However, an error in the way the coupon was made failed to prevent it from being used on other items. Coupon glittering occurs when a customer uses the coupon to purchase a $100 deck chair and pay nothing for it.

Coupon glittering can be accidental, or it can be deliberate. There are even online communities of shoppers who spread information about coupons that can be exploited in this way.

Coupon glittering is more commonly used for making purchases at brick-and-mortar stores, but online retailers should still be aware of the methods used by coupon glittering communities to protect any online discount codes they may offer.

What are the different types of coupon glittering techniques?

1. Copying coupons

Customers attempt to make copies of coupons from time to time to cash in on a particularly great deal. However, it becomes a much bigger problem when they make copies of coupons that they know have glitches in them.

For example, a customer may be alerted to the fact that a coupon your business has issued can be used on other products. Instead of just using the coupon once for a purchase, they make multiple copies of the original coupon and attempt to use them all for a variety of products.

Most brick-and-mortar retailers don’t accept copies of coupons, but some do. It’s really important to make sure you’re only honoxring the original version.

2. Trading, buying, or selling coupons

It’s not unusual for family members or friends to give coupons to each other, especially when they know someone is looking to purchase the item the coupon is for. These types of trades are generally acceptable, and there is not much businesses can do to stop them from happening.

However, where it becomes coupon fraud is where people buy, sell or trade coupons that they know can be used in a glittering scam.

As a retailer, it can be hard to know if a customer has purchased or obtained a coupon with the intent of abusing it. However, you can make it a condition of use that a coupon is not transferred between individuals, and enforce this condition where you can.

3. Decoding coupons

Decoding coupons refers to the barcode number associated with a specific paper or printable coupon. The barcode is set specifically to signify the amount of the discount it contains and the products it can be used for.

Some people with a genuine interest in coupons can decode coupons to learn what they’re for, but more commonly this technique is used to identify ones that can be exploited. The average customer wouldn’t know the difference between a coupon that can be used in a glittering scam and one that can’t. A fraudster can decode coupons in advance to identify which ones have glitches.

4. Coupon modification

A customer who can decode coupons can not only identify ones with glitches, but they can also use that knowledge to modify otherwise secure coupons.

By understanding coupon codes and what different codes allow coupons to do, they can essentially create fake coupons out of legitimate ones.

For example, there is a specific section of the coupon barcode that represents the item the coupon is for. Say that is represented by the code number 33. However, a fraudster may realize that they can change that number to 88, and it will allow the coupon to be used on another item.

How does coupon glittering harm businesses?

Glitter couponing essentially allows fraudsters to steal from an unsuspecting business.

Taking the outdoor furniture example from before, a retailer can afford to offer $100 off that set of outdoor furniture, because it’s only a fraction of the furniture’s price. Let’s say it’s worth $1,000, which would mean the coupon represents a 10% discount. However, if someone in a coupon glittering scam uses that coupon on the $100 deck chair, that’s 100% of the price of that item. They would get that deck chair for free.

You would never issue a voucher that allows a customer to get anything for free. Unfortunately, that is what can happen if a fraudster manages to "glitter" your coupons.

How can businesses protect themselves from coupon glittering?

1. Check the source of coupons used

Coupon fraudsters are more than capable of making fake coupons. They use the layout of your recent coupons to replicate them, then recode them for new products and discounts.

Remember, your business is the only legitimate source of your coupons. That means you know better than anyone what your coupons can and can’t be used for. Ensure that employees are trained to recognize fake coupons, and have access to a list of currently active coupons to cross-check when a customer attempts to redeem something unfamiliar.

2. Always check the expiration date of coupons

If a customer presents a coupon that’s out of date, there’s every chance it’s an accident. Sometimes expiry dates aren’t clear, or they may not have even realized your coupon has expired.

However, they may be trying their luck because they’re aware the coupon has a glitch in it. It’s very easy to hide a scam behind a claim of not knowing, and it’s hard to prove if you think it may have been deliberate.

However, you can reduce mistakes by making it standard operating procedure for staff to check the expiration date of all coupons they accept. Expiry dates are a normal part of coupon use, and you should only accept coupons over the period in which they’re valid.

3. Set up prevention protocols

There is a range of protocols you can introduce to prevent your customers from using fraudulent coupons.

  • Monitor social media and glitching groups to see when your coupons are being defrauded
  • Only issue coupons for one specific product and timeframe, so staff know they cannot be used for anything else
  • Put a cap on the maximum dollar value that cashiers can override using coupons
  • Conduct thorough testing of your coupon booking systems to limit the chances of producing coupons that can be glittered
  • Monitor each instance of coupon use. You may not prevent one-off glitches but this will enable you to identify systemic glittering before it becomes a much larger problem

4. Switch to digital coupons

Digital coupons are harder to replicate and modify, which can go a long way to preventing coupon glittering.

You can also personalize your coupons if you’re sending them out digitally to your mailing list. This allows you to verify a customer’s ID when they present coupons. Even if that customer spots a glitch in your coupon, they’re less likely to try and defraud you if you know who they are.

Digital coupons are also easy to void when the period of your sale ends. Because they’re scanned digitally, you can avoid human error by simply updating your systems to identify and reject old coupon codes.

5. Provide employee training to spot coupon glittering

Your employees are the ones on the front lines of your defense against coupon misuse, so it’s important to take the time to train them to detect it.

They should know what coupons are in the market at any time, so they don’t accept expired coupons.

You can also teach them the importance of checking coupons that customers present to them to make sure they’re not being exploited. It can be easy for a cashier to go into auto-pilot and not realize that they’re processing a glittering scam. You can encourage vigilance and alertness, and help them to understand how damaging glittering can be to your business.

Conclusion

Coupon glittering is most commonly a highly organized form of fraud targeting brick-and-mortar stores, involving groups of people who actively look for coupons with glitches that can be exploited.

The thing is, coupons can be very effective marketing tools, so many businesses want to be able to continue using them despite the risks. Thankfully, much of the risk can be mitigated with thoughtful employee training and fraud detection processes.

All article tags