Invalid Voucher Codes Losing UK Retailers 425,000 in Online Sales Per Month

Invalid online voucher codes could be costing UK retailers big time, with new research estimating that over 400,000 sales per month could be lost. The research, by Smarter Click (www.smarterclick.com) found that customers who use a working code have a much higher conversion rate than non-working codes (55% vs 14%), and was based on a combination of client data and UK retail stats.

Looking at their own data, the team also found that between 15%-40% of codes attempted on their clients’ websites were found to be faulty, with the average coming in at 25%. For some of the bigger brands this resulted in as many as 50,000 invalid code attempts every month.

Using Comscore’s report that ascertained UK online fashion retailers received 26,768,000 unique visitors in one month, the team were able to work out that UK fashion retailers lose 424,075 online sales every month due to mishandled codes practice.

From a cross section of retailers working with Smarter Click, it was found that the average basket value was 8.2% higher when a discount code was successfully implemented, proving that the voucher code industry does have an incremental part to play in the industry, but that quality drives performance.


Ennis Al-Saiegh, CEO of Smart Click, spoke to SME Technology Guide about the research, and how small retailers can minimise the risk of this happening to them.

Q. Why are so many codes failing? How are there so many invalid codes in circulation? 

“Invalid codes primarily come from the same place that valid codes come from; provided by third party sites – partners of the retailer – usually via affiliate links. However, in a world where social is the fastest growing industry, social codes are also fast becoming a dominant player, with influencers providing their followers with discount codes and friends sharing codes with each other.

“As to why codes would be failing, there could be a number of reasons behind this. With third party partners, the code may simply have lapsed without the publisher realising; there are a lot of retailers for the publishers to audit and without the tools to monitor these, errors can happen. Or it could be more cynical; as partners that provide invalid codes could still be receiving commission for this, the sites may be knowingly providing these defunct codes to receive the commission – this is where Smarter Click in particular are trying to provide a solution to retailers that gives them independent, automated transparency. Another possibility is that codes might have terms and conditions in place that consumers may be unaware of that mean they don’t actually qualify for the discount, and these trends need to be identified and fixed.

“In the world of social codes, this becomes even more difficult to police as often these are not being tracked through affiliate networks or agencies and therefore monitoring then lies with the retailers. Smarter Click’s technology allows the retailer to pinpoint the social source of each individual code, enabling an open dialogue with the retailer and the influencer or customer, improving customer service and customer experience with the brand in question.”

Q. Why voucher codes still important to how small retailers in particular – and how can it help them stand out in an ever more competitive market? 

“Voucher codes still remain a great way to entice customers to buy from a retailer, or a particular product. When price determines where so many people shop, if a smaller retailer can provide a discount code for a product, this should be taken advantage of. 

“Looking at Smarter Click’s stats of the conversion rate of a working code vs. a non-working one, you can clearly see the incremental value working voucher codes have. In particular, for smaller retailers, competing against marketplaces that can afford to discount heavily, being able to provide personalised discounts and experiences based on consumer behaviour provides them with a USP that isn’t available with the bigger retailers.”

Q. How will retailers know if their customers are trying but failing to use voucher codes? 

“There are no systems available to retailers currently that identify the user experience for voucher code usage, this was the impetus behind the launch of Smarter Codes. Smarter Click believed that at this critical point of the customer journey, brands were losing customers due to a basic problem, but were not aware of it. Having now built this tool, the stats have highlighted that they were indeed correct. 

“All the brands that Smarter Click have spoken to about this solution have fed back that this has been a frustration of theirs for a long time and the manual checks that have had to be in place have been far from efficient, so to have a tool that automises this whole process means that then can now be aware of it and take action in real time. The Smarter Codes tool is unique, and has already been used to add value to its clients, but more importantly it improves the customer experience and their overall satisfaction.”

Q. What steps should small retailers take to combat this problem, and what technology can help?

“The first step is to be careful with the partners that you choose to work with, work with their agencies and networks to ensure best practices are being implemented and follow IAB regulations. 

“Smarter Codes and the team at Smarter Click are available to all retailers no matter what size and can work strategically with the retailer to increase revenue by preventing bad codes practice. The overall goal is to identify problems and resolve any issues, resulting in happy customers – that want to buy but are unable to because of a bad voucher code – from leaving the site.”

Q. Putting in the voucher code is the final part of the cycle – how can small retailers get more customers to the conversion stage?  

“There are numerous ways to increase customer conversion and get them on to your site, and utilising publishers is actually a good way to do this. If you have a voucher code available on a partner’s site and a customer comes across it, it might influence them to visit the site and make a purchase, the affiliate industry has repeatedly shown that this is an incremental way for brands to drive traffic to site. To keep customers on site it needs to run smoothly and efficiently, and you can use methods such as targeted overlays to persuade them to stay.

“Personalisation is a massive part of keeping a customer satisfied, and a personalised journey is much more effective – being relevant leads to customers staying longer, having higher order values and conversion rates.”

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