Avoiding Fraud on Mobile Coupons in Your SMS Marketing

Have you checked your SMS coupon redemption rates lately? Average rates run around 30%, and personalised messages often reach 45-50%. Those numbers make marketers want to jump up and run some SMS marketing campaigns!

But there is one issue that plagues digital coupons, including those delivered via SMS: Fraud.

Since there’s no paper to hand in, online coupons are duplicated and shared even when you don’t want them to be. That’s a problem that could add up to a lot of money if you don’t do anything about it.

There are probably campaigns where you want people to share the information and even the coupon. But if you have a particularly good offer you’re making – perhaps to entice people to sign up to your list – you’ll want to limit coupon reuse for obvious reasons.

Your existing POS system probably has a way to generate codes for coupons, or at least some way to accept them into the system. If so, you can use it to create enough codes for everyone on your SMS list, or as many as you think you’ll need if you’re growing your list.

Then, if you’ve integrated your SMS solution into your POS then you can populate your SMS messages with a unique code for each individual.

If you aren’t integrated, then you’ll have to check on the options your SMS provider has for uploading and merging the codes into your messages, at fastsms you can do this using custom fields (mail merge). The important bit is that your POS system will recognise the codes, and mark them as used or invalid once they’ve been redeemed.

Not every retailer has a POS setup to accept codes, or to generate codes in the way I mentioned above. In those cases, there are a couple of other options to avoid repeated use of the coupons…

Oftentimes an SMS message will say what the offer is, but there won’t be a code in the message itself. The customer needs to click a link that takes them to a mobile webpage with the coupon on it.

It’s easy enough to take a picture of a coupon on that webpage, and then reuse the coupon or send it to other people to share. So to avoid that happening, some businesses are adding timers to the page.

This process can be implemented a couple of ways.

1. The customer clicks the link and goes directly to a webpage with the coupon. The timer is activated immediately and counts down to its expiration time – however long that is. If the person tries to access that webpage again later (from the message or directly in the browser) the timer will update to the current time. While this may sound difficult to set up, it’s something fairly easy to implement for a web designer.
2. The customer clicks the link and is taken to an information page. That page repeats the offer from the SMS message. But it also tells the customer that the coupon is only good for a short amount of time. There would also be a link to the actual coupon the customer would click when ready. The instructions should be clear enough that the customer understands they need to wait until they are ready to make the purchase. This scenario works well when the customer is shopping at a physical location so they can open the link during checkout.

Your staff would need to be trained so they know to look for a timer that is actually counting down and not a static screenshot. Will there be people who take a video of the countdown and try and use that repeatedly? Yes of course. But that can be counteracted by including the date and current time on the coupon too. A cashier who is paying attention would notice the different time and know the coupon isn’t valid anymore.

Another method I’ve seen used is number 2 from above, but without the time. The coupon needs to be accessed in front of the shop assistant or it won’t be considered valid. The link in the SMS message leads to a dynamically generated webpage that can’t be accessed a second time using the same link.

Usually when I’ve seen these and try to go back to it later I get a message letting me know the coupon is no longer valid. Some companies do this well by providing a message that says the coupon expired. Others just provide a 404 error page with no notice of what happened to the coupon.

This example is from a popular sandwich shop that sends out weekly offers. They use a combination of solutions to ensure each customer only redeems the offer once.

First, here’s their message with a link to redeem the offer.

When you click the link, you arrive at the following webpage:

When you choose to Redeem by clicking the button, the following message pops up:

Clicking Cancel brings you back to the redeem page, where you can click Redeem again later. If you click Confirm, you end up at the timer. It counts down to from five minutes to zero, and includes a note to the clerk that the numbers need to be moving for the coupon to be valid.

You’ll notice there are no coupon codes to enter into the POS, so the clerks must already know the redemption instructions for the offer.

If the customer clicks too soon, they’ll see the following screen when they checkout:

Implementing any of the above solutions can help reduce coupon fraud in your SMS marketing messages. Of course, no solution can eliminate fraud completely. There will always be those people who manage to trick the system, but these methods will help keep most customers honest.