When a web-savvy customer sees a promo code field in the checkout process, it’s a call to action – a call to search Google for a coupon code, and there are plenty of affiliate deal and coupon sites to be found. (Hey, even Alan Rimm-Kaufman does it!)

This action is a distraction and can cost you big bucks — especially if in this economy you’re already heavily discounting your merchandise.

There’s no shortage of coupon sites in search results:

How Coupons Can Clip You

1. The coupon immediately eats your margin by X% and an additional Y% for paying the affiliate who didn’t refer the customer, only cherry picked the commission.

2. Depending on how you track channel conversion, you may be cannibalizing other marketing channel attribution like email or SEO.

3. You erode trust with the customer and potentially damage your brand. Coupons can cheapen your image, and you condition the customer to expect a discount next time too. They may never pay full price from you again.

Fixing the Problem

Is the solution to cut out coupon offers? No, rather cut out the coupon box at checkout, and show it only to customers who have a coupon code. There are a couple ways to handle this:

1. When a customer arrives via an affiliate link or email with a promotion, the URL includes a parameter indicating the shopper has a promo code which is stored in the shopper’s session. When the shopper arrives at the checkout page, the parameter is looked up in the session and the box is displayed. Customer enters promo code manually. All other customers do not see a box.

2. The URL parameter includes the promo code and the discount is automatically applied at checkout. The customer does not need to enter a code, nor does a coupon box need to be displayed.