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Why Coupon Codes are Killing Your Business

May 27, 2009 By Joe Rawlinson

The coupon code box you have in the checkout process of your e-commerce store is a disruptive psychological trigger. Only customers with a coupon code in hand will sail easily through that part of your process. Everyone else is headed for trouble.

When customers don’t have a coupon code, it causes them to pause. “Why don’t I have a coupon code? Am I missing something? Who are these special customers that get coupons when I don’t?”

All these questions are raging in the heads of your customer and they create an unsettled state of mind. At this point your customers may do one of these things:

  • proceed to checkout because they just don’t care about price
  • proceed to checkout anyway, but just a little more displeased than before
  • leave your site and go somewhere they know they can get a discount
  • go search for coupon codes and return and use one they found via Google

Many of these outcomes mean you sell your product and get paid. But at what cost?

Some of these results mean you get paid less than you were originally going to get (and what the customer was even willing to pay) before you provided the confusion of a coupon code box.

The Get Elastic e-commerce blog also points out that when people search for coupon codes online, the resulting sites often sneak in an affiliate link so you not only lose the price of the coupon but you have to pay out a commission that wasn’t necessary.

To counter this, the Get Elastic folks recommend using custom URLs that don’t require people to enter coupon codes or that selectively show the coupon code box. The discount shows up when appropriate and doesn’t confuse people when not applicable.

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