Promo code abuse: The real risk behind that 10% off offer

Your discounts might actually be making you poorer. 

Yes, you read that right.

You definitely didn’t offer that “10% off” just to get gamed by fake accounts 🤔

And you definitely didn’t mean for your exclusive promo code to end up on every coupon site across the internet.

But here we are. 

Promo code abuse quietly bleeds eCommerce stores, SaaS platforms and DTC brands dry, and often, most businesses don’t even realise its happening (or the real extent of the problem).

Sure, you can plan for skewed figures for the first sale, because your CLTV will pick back up over time when they place more orders, right?

But those fake accounts aren’t the customers that tip the needle of CLTV in your favour, and the chances of them returning and purchasing without another promo code? Let’s just say they’re slim to none 👎

If you’re giving discounts and incentives without the right guardrails in place, you could well be looking at:

• Higher CACs masked by fake “conversions”
• Lower CLTV due to those serial discount hunters
• Lost margins on repeat misuse
• And worst of all, data you can’t trust to make smart decisions

Let’s just get one thing straight though, not all discount users are bad actors ⚠️

But if you’re not monitoring who’s exploiting your codes, you’re leaving the front door wide open to misuse, and in turn, you’re leaving your bottom line exposed to a potential nose dive.

TL;DR: For those readers with short attention spans

If time is precious and long articles aren’t your thing, here’s our quick “Too long, didn’t read” summary of the problem and the solution 💪

The problem

‍Promo code abuse happens when customers or bots misuse discount codes by:

• Reusing first-time discounts across multiple fake accounts with no intention of actually becoming a customer that positively drives your CLTV
• Sharing exclusive promo codes on public forums that were only meant for genuine customers

This isn’t “savvy shopping”, it’s revenue leakage that inflates your numbers while quietly eroding your margins 🛍️

The solution

• Use device fingerprinting to detect and  block repeat offenders ✅
• Analyze IP behaviour to catch proxy/VPN users gaming the system ✅
• Create real-time alerts to flag suspicious activity ✅
• Go beyond GA4’s limited data, with session-level insights from tools like Hitprobe ✅

Stop your promo code bleed, protect your CAC/CLTV ratios and get clean, actionable data you can actually grow from 🚀

It’s free to sign up, you’ll be up and running in minutes - get started now.

So, what is promo code abuse?

Essentially, it's when your business's good nature gets exploited in a way you simply didn’t intend.

It could be:

• A single user creates multiple email addresses, often from disposable emails or using the old “john.doe+sneakysecondemail@gmail.com” trick to extend a genuine email address. Typically, they use the same “first-time buyer” discount code on repeat 🚨
  
• Websites distributing codes meant for targeted campaigns and loyal customers (or potential new customers that fit within your target audience).
  
• Affiliate partners generating fake conversions by recycling promotion codes 🗑️
• Bots doing very bot-like things, scraping your checkout page and testing out combinations of expired or restricted codes.

Here’s the kicker though - the user doesn’t even have to be malicious 👀

Many just see it as “just being smart”, because why pay full price when there’s probably a code out there that gets you something of the checkout total.

But, that so-called “savvy shopping” behaviour can quickly spiral out of control, leading you to serious losses 📉

Who’s actually affected by promo code abuse?

It’s a pretty universal problem, in fact, anyone who has a checkout or offers a promo code is open to risk, but it does hit some sectors harder than others:

eCommerce and DTC brands are prime targets. With first-order discounts, influencer drops, and launch campaigns flying around, it’s easy for bad actors to game the system by creating multiple fake accounts, flying under the radar 🛒

SaaS and subscription platforms face repeat abuse from users cycling free trials or exploiting one-time discount codes. A single person can generate dozens of “new user” signups, and never pay a penny 📦

Retailers and marketplaces see exclusive codes leak onto public coupon sites and browser extensions. What was meant for a VIP segment of loyal customers fast becomes a free-for-all that kills margins 👟

Streaming, gaming, and digital goods platforms deal with code farming and resale. Discounted access gets scooped up, repackaged, and sold on, turning your loss leader into someone else’s payday 🎮

Ultimately, if you offer a checkout and an incentive, you’re a potential target. And the more you scale, the more appealing you become.

Why the problem exists (and keeps growing)

Promo code abuse isn’t a fluke, it happens because most systems are built for customers ease of use and convenience, not control and limitation.

If you’re reading this article, your main business goal is probably to drive conversions. So you create discount codes 💭

But some customers see loopholes, not loyalty perks, so they push the limits…but does your platform stop them (or can it?).

Maybe you’re running ad campaigns everywhere. Ads, email marketing and lifecycle flows, influencer marketing…maybe you’re doing it all, and every ad channel should have its own unique code to track and measure success.

But suddenly you’ve got a promo code chaos shaped problem. Codes get leaked, reused, and picked up by bots scraping the internet faster than you can say “Hey, our AOV’s dropping" 📣

Website builders make it really easy to give discounts, but not necessarily ways to protect them. Platforms like Shopify, WooCommerce and Wix are designed to help you launch fast and sell more - what’s not to love. 

Equally, they make it simple to spin up new promo codes, but give you zero visibility into who’s using them, how often, and whether they look like they’re gaming the system 🔍

But if there’s no real user verification taking place (and we’re not talking about email addresses at sign up because lets face it, before this paragraph is finished, you could have probably created a disposable email address that simply misleads your system to think it’s a fresh new sign up), then your system is open to being tricked into handing over first-time discounts again, and again, and again…

Bottom line, email addresses are a terrible identity signal 🚨

Another issue is that duplicate accounts tend to go undetected.

Most systems don’t fingerprint devices or monitor IP activity, so if one user creates 10 accounts from the same device, they all look legit until you find a way of scratching the surface, and at that point, it’s too late.

The tools that can detect abuse are either complex or too expensive. Enterprise-level fraud systems exist, but they’re usually overkill for most eCommerce brands or SaaS companies. Meanwhile plug-and-play tools often stop at the surface-level metrics that don’t give you behavioural data.

Traditional analytics tools simply aren’t built to solve this problem. GA4 won’t tell you if one user has signed up give times, or connect sessions across devices, flag suspicious IP address overlaps or even alert you when the same device fingerprint shows up again and again, despite different email addresses.

Bottom line? Promo code abuse is probably happening because your current tech stack isn’t built to stop it, and most of the tools that are, weren’t made for marketers 🤷

A real world example

If you’ve ever searched for a food delivery deal, you’ve probably seen a HelloFresh promotion and all too prominent code 🍽️

Their growth engine is literally built around first-order discounts and referral rewards, and it worked…until it didn’t.

At its peak, HelloFresh was offering pretty big intro discounts like “50% off your first box”, but savvy users quickly realized it was fairly simply to exploit the system. 

In fact there are Reddit threads with thousands of comments, all breaking down how to create endless free trials using:

• Disposable or alias email addresses ✉️
• Slight name variations, like “Olivia, Liv, Oliviya, Olive” 🧑
• Prepaid cards or virtual payment methods 💳
• Friends addresses, slight address tweaks and even parcel lockers 🏠

Some users ran dozens of fake accounts, racking weeks and even months of discounted meals. In fact the abuse was so widespread it became part of an “online hack” culture.

The problem? Aside from poor controls, HelloFresh had no scalable way to tell one household from another.

What it cost them

While HelloFresh hasn’t publicly broken out the losses breakdown associated with its promo code troubles, the companies 2023 financials showed serious warning signs:

• Customer acquisition costs continued to rise year on year, even as they watched their retention rates fall
• In Q3 2023, HellFresh posted its first quarterly loss in years
• Analysts flagged unsustainable discounting and over reliance on promotions as key sources of their troubles

Let’s be clear, promo code abuse isn’t the only reason they found themselves in trouble, but it clearly contributed to inflated CAC and poor CLTV, and that’s a lethal combination for any subscription based brand ⚠️

How they responded

Since then, HelloFresh has definitely started tightening the funnel:

• Phone number verification has become more common during signup
• Referral programs have been scaled back or in some cases, completely redesigned
• Some regions now have limits in place for addresses and delivery zones

But…there’s still no public sign of advanced fraud detection, and the same code leaking threads are still circulating today.

What they could have done

Stopping this kind of abuse needs more than just email validation. They could have:

• Blocked disposable or suspicious email domains commonly used in fake signups
• Used device fingerprinting to detect when the same device tries to create a new account or claim new customer deals
• Monitor IP address behaviour to flag bulk signups from the same location or VPN
• Tracked address usage frequency to detect discount stacking at the same delivery address

How Hitprobe tackles promo code abuse

Hitprobe was purpose built to protect your marketing funnel, from the ad click all the way through to conversion and beyond. When it comes to promo code abuse, here’s how it locks things down:

Device fingerprinting 🔍

Hitprobe tags every single visitor that clicks your ad and lands on your site with a unique device fingerprint, so if someone tries 10 different “new user” signups from the same device, you’ll know about it.

IP & geolocation analysis 🌍

There’s more to an IP address than just numbers and dots. Hitprobe not only detects repeat actions from the same IP address, but can also flag the use of proxies and VPNs as well as geographical anomalies (like a promo code being redeemed in the Philippines for a brand located in the US).

Real-time alerts 🚨

Need to know when a certain button is clicked, like a checkout submission, or maybe when a promo code is submitted? Hitprobe allows you to create custom events either through the JavaScript tag or API, meaning you never need to miss a beat where promo codes are concerned.

Wrap all this up with detailed analytics, risk and engagement based rules and detailed session logs and you’ve got the complete package to shut down promo code abuse, for good.

The true cost of doing nothing

Promo code abuse doesn’t just shave a few percent off your margins, it compounds it. Fast.

Let’s break it down with some napkin math, basing it on some example eCommerce figures.

You’re running a DTC store doing 2,000 orders/month, with a 10% discount code for first-time buyers 

Let’s say that on average, that knocks off £5-£10 off the final cart, but 5-10% of those redemptions are fraudulent.

Here’s how that stacks up:

• 150 fraudulent redemptions/month (based on a low 7.5% estimate)
• Average discount per order of £8
• That's a monthly loss of revenue at £1,200
• Annual bleed of £14,400…and that’s just on one promo code

And that’s before you factor in:

• Increased CAC (customer acquisition costs) that you’re incurring just to acquire fake “new” customers
• Lower CLTV, because they never pay full price, so your margins just tank
• All of the distorted metrics you need to rely on

For bigger eCommerce brands, multiplying this across campaigns, partners or influencer codes and it's easy to leak £30/50k/year, all in invisible promo abuse.

Ultimately, it’s not just lost revenue, it’s wasted growth.

You’re subsidising repeat abusers while misreading your real acquisition performance, and that’s only going to make you scale problems and bad habits.

Our final thoughts

Promo code isn’t an edge case, it’s a silent growth killer that hides in plain sight 🥷

The right tools mean that you don’t need to shut down your promotions, you just need to smarten them up.

Hitprobe gives you the visibility, protection and peace of mind to keep growing your brand without giving away the entire shop.

Let discounts drive real growth, not real losses 🚀

Start protecting your offers with Hitprobe, before the next discount leak costs you.