Coupon fraud protection

Sunday, May 1, 2011

While coupons have "no cash value", someone still may try to get the deal without paying for the coupon. How to help the vendor to identify and eliminate fraudulent coupons, like attempts to use the same coupon multiple times, or even outright forged coupons?

The following tools provided by Getsocio may be used to counter fraud:

  • Buyer's name is printed on coupon
  • A unique coupon code is printed on each coupon. The number is generated randomly, so it cannot be easily guessed.
  • The daily-deal site owner can print a list of coupons for the deal with codes and names of customers, and give it to the vendor.

To begin with, for the promotional low-price deals (under $5), it is probably no need to bother, as the deal goal is to get as many people as possible, so if someone comes with a forged copy of coupon – let them have it.

For the most of deals the simple check of the coupon code should suffice. The vendor takes the coupon from the customer and checks if it matches the code in the list of coupons.

  1. If there is a match the vendor should mark the coupon as used in the list (like cross it out with the pen on the printed copy of the list), then serve the customer.
  2. If there is a match, but the coupon is already marked as used – tell the customer that this coupon has been used already and do not serve it again.
  3. If there is no match for the coupon code in the list, the coupon is clearly forged, and should not be served.

Finally, for the most expensive deals (like $300 and above, no strict rule here) it may be reasonable for the vendor in addition to regular coupon code check, to request an ID from the coupon bearer and match it with the name on the coupon and with the list of coupons.