Introduction

Discount vouchers are codes issued by a merchant to enable a consumer to secure a discount on the usual retail list price of a purchase. Discount codes can be unique for a marketing campaign, a specific user, a group of potential or existing purchasers, or unique to a distribution channel.

There are three main types of sites in which discount vouchers are used online. These include stand-alone specialist discount voucher sites and sites that include discount vouchers as part of the site content. The third type are the user-generated content sites, which incorporate discount vouchers, these should be, but are not always, moderated by the site owner.

Discount vouchers have been widely introduced by merchants as a method of acquiring new customers, for rewarding, reactivating and retaining existing customers, and as a tactical marketing tool for shifting stock.

Issues

Most problems associated with discount vouchers are to do with the unauthorised and incorrect use of the codes. A few of the main issues here are:

• Distribution and redemption via a channel which was not the intended distribution route
• Distribution to and redemption by a user who is not part of the target user group
• Unauthorised distributor, with potentially harmful brand impact
• Unplanned-for reduction of gross margin due to elevated redemption costs
• Misrepresentation of the terms of the offer, sometimes with no code on offer at all (aka ‘click-to-reveal’, leading to forced clicks and cookie stuffing)
• Un-moderated, user-generated content leading to abuse of voucher terms and conditions

Solutions

Affiliates must respect merchant wishes with respect to how, what, where and for how long voucher codes can be used via the affiliate channel. They should moderate user-generated content to ensure that the terms and conditions of the offer are respected in all cases. Affiliates need to abide by general advertising standards as to misrepresentation and not indulge in misleading activities.

Merchants need to ensure that only the target group is able to redeem the offer by better control of the redemption process and ensuring that they invest in robust and reliable voucher management tools and technology. The merchant also needs to ensure that the user can only redeem the voucher if they are referred via a designated distribution channel. Vouchers must be tied into specific affiliate commission or reward levels in order to maintain acceptable gross margins. Merchants should specify clear and precise terms and conditions in plain English for each use of voucher codes so that affiliates are clear about the usage parameters, and to avoid any misunderstanding. Merchants need to communicate what can and cannot be used via the affiliate channel both to the network and to their affiliate base. Merchants should understand that some leakage is inevitable, can even be valuable, and that the effects should be understood at the planning stage.

Networks must accept a level of responsibility, dependant on the service level agreement with the merchant, for monitoring the use of voucher codes. Networks should prevent, where practicable, any discovered abuses or inconsistencies in the use of discount voucher codes. It is in networks’ own interest to develop technical solutions to enable the easy use and reporting of discount vouchers.

Voucher sites are a powerful segment of the affiliate arena which, when used correctly, can help achieve outstanding marketing results. Voucher sites should be considered for inclusion in the affiliate partner mix, either at the planning stage or during execution for optimal program performance.