Happy New Year! January is a good time to take an earnest look at your promo strategy. Now that another holiday season has come and gone, eCommerce merchants are analyzing performance as they gear up for the year ahead. For many merchants, the holidays are a time to put marketing dollars to work, rolling out promotions intended to attract new customers during the rush and keep current ones coming back. Inevitably, through that welcoming window of opportunity, many policy abusers find their way in.

The holidays are a busy time for promo fiends, and many merchants saw abusers target eCommerce businesses with the same zeal as those businesses were targeting new customers. In many cases, once seasonal promotions are over and analyzed for ROI, merchants discover that a significant percentage of their new email signups and accounts created are fake.

Imagine your average shopper walking into a store, using a coupon, and happily walking out with the discounted product. Now imagine that same shopper, wearing a fake mustache, coming in with the same coupon, and purchasing a second discounted item. Later that day, they walk in with sunglasses and a hat… you catch my drift. The scope of “disguises” that contribute to online abuse is endless, and a virtual fake mustache is much harder to detect than an in-person disguise. 

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Below are three ways promo abuse is even more damaging during the holiday season, and how merchants can build better defenses, and a better promo strategy, in 2022.

You’re basically throwing money away

You could be sending a big portion of your marketing budget down the drain by inviting the same customer back to open disposable accounts. Abusers who misuse referral promos, coupons, and other types of promotions are known to create multiple accounts for the sole purpose of redeeming a promo code – never to be heard from again. These accounts are of zero value. So why should you funnel so much of your marketing money their way?

Disposable accounts also throw your customer acquisition figures out of whack and leave you in the dark, only to attract more low to zero value accounts that abuse your marketing budget. The actions of this unintentional target audience have the ability to drive your entire marketing and promo strategies into a vicious cycle of more abuse and waste. 

The right items are going to the wrong people  

Not only might you not have gained new business through your marketing strategy, but the promotions on items you intended for good, loyal customers also likely left the gate wide open for abusers. Perhaps one of the most well known stories in the promo-abuse world is of the 24-year-old finance student who used Uber’s promo code to get himself $50,000 in free rides.

Abusers are especially quick to act during the holiday season, so they have a good chance at ordering many promotional items before your good customers have even noticed there’s a promo. This ends up leaving you with low stock and unhappy customers who missed a should-be positive experience with your store. 

You work hard to make sure your promo strategy is as accurate and effective as possible in selling your prized products – why make it easy for abusers to take advantage? Many merchants end up with frustrated customers who aren’t able to purchase the products they want with the promos they earned. And we all know that unhappy customers are quick to blame the brand, even when bad actors are at play. 

You get a 2 for 1 deal: promo abuse and reseller abuse 

Your promos could be creating unplanned competition. Resellers are adept at getting their hands on merchandise at discounted prices as well as limited stock items. When attractive seasonal promotions are in-store, they apply the same methods to gain competitive prices on coveted goods. Later, they could be offering your goods for even more competitive prices in new territories. Resellers cost you twice: first in goods, then in revenue. Having your products sold on a third-party eCommerce site also decreases your business value and reputation, sending loyal and potential customers to shop elsewhere. 

Next year, to save you from tears…

Merchants managing promo abuse walk a fine line, as promo policing is one of the most delicate problems to solve. Rather than letting abusers dictate your promo strategy, you can prevent further abuse by relying on the analytical capacity of a powerful AI-based solution. Through data-based decisions, you can boost the next holiday season’s promotional ROI by attracting real, loyal customers while preventing promo abusers from eating away at your marketing budget. 

Riskified’s technology offers the unique capability of scrutinizing the real identity behind each transaction, stopping policy abusers in their tracks. Policy Protect allows merchants to grow their eCommerce businesses confidently, making sure marketing campaigns and promo programs are used to grow the business.