Offering discounts or coupons has historically been an effective marketing technique. Stores would offer a limited number of coupons to increase brand awareness and attract both new and returning customers, allowing them to control the number of discounted sales. With the introduction and non-stop growth of eCommerce, the landscape is continuously evolving.

As more consumers make online shopping their primary shopping method, discount and couponing browser extensions have seen insane growth in popularity. Discount websites and browser extensions include Honey, RetailMeNot and Capital One Shopping, Coupert, Cently, SimplyCodes, and many others. They automatically find, and apply discount codes for online shoppers, often supporting 100,000+ online stores!

If you’re familiar with this problem, I’m sure you’ve been wondering - Are coupon extensions worth worrying about? Are they helping or hurting? Do they help drive online sales, or are they parasitic to your store’s revenue? (Hint - it’s the latter!)

Now, if coupon codes are being automatically injected into your shopper’s carts at checkout, it indicates that shoppers received the code only after they arrived at your store, without knowing that a discount would even be offered.

These automatically injected codes aren't driving customers to your site, but are handed out at the brink of conversion. Referencing Shopify's conversion stats, When a customer reaches your store’s checkout, ~97% of customers have already abandoned their purchase. The remaining ~3% have demonstrated high purchase intent, and these last-minute discounts often just erode the profit margins on sales that were very likely to occur anyway.

What does that mean? You’re giving out discounts to customers that were going to buy anyway! Discount extensions chisel away at both your profit margins and your sanity!

How do coupon extensions get their discount codes?

The most common method is by spying on its users (your customers)! Discount extension users do not get a free lunch! The price they pay for all those discounts is their own privacy. Frequently, the extension requires being able to view ALL your browser activity. Why? They can use this data for not only monitoring all your internet browsing activity (both eCommerce and non eCommerce websites!), but for watching which discount codes are utilized by its users, the success rate, the discount savings amount, and much more.

For example, let’s say a Honey user is online shopping and has a special discount code they received as a special promotion for a small customer segment. When they use this new discount code manually, Honey observes this, and sends the data back to their servers. Next? They start giving out that code to ALL other Honey users, with the priority to give out the BIGGEST discounts they know of!

Discount codes are very rarely meant for 100% of the public. Think affiliate codes, email and SMS signup codes, and even employee codes. The worst is often when test codes leak that grant 100% off! What a headache! This not only impacts your revenue and causes headaches, but skews your marketing campaign and affiliate data as well... Was that podcast sponsor or affiliate a great fit for promoting your brand, or did the code just leak to discount extensions?

If an affiliate’s code is leaked to one of these sites, how much of the commission that you pay them is through accurate conversion data? Did the affiliate sneakily leak their own code to greatly juice their payout?

Let's fight back together.

While coupon extensions may seem beneficial to the consumer, it's essential to understand their potential impact on your eCommerce business model. Your brand reputation, marketing strategy, and profit margins could all be at risk. Therefore, tread carefully when navigating the new terrains of digital marketing.

Ready to start monitoring and combating these discount extensions? Check out Omnipotent on the Shopify app store!

TLDR?

Discount extensions are parasitic to your store's revenue. They have quite the gambit going - they reap all the rewards and your store pays the price. Let's fight back. You can find the Omnipotent app here and you can get in touch at p@omnipotent.shop.