Coupon Extensions: The Harsh Truth

Reality-Of-Coupon-Extensions-The-Harsh-Truth

Coupon Extensions: The Harsh Truth

The concept of coupons was first introduced in 1887 by Coca-Cola. Coupons have grown dramatically since then.  Statista reports that about 90% of U.S. consumers claim to have used at least one coupon in the past. No wonder coupons are successful – everyone loves to get a good deal.

Coupons take multiple forms in e-commerce.  Merchants can send targeted coupons to their existing customers, seeking to “reactivate” a customer who hasn’t shopped recently.  Merchants can promote merchandise they’re especially focused on, such as end-of-season clearance.  Or merchants can try to increase basket sizes.  If a customer usually spends $30 at a given store, a merchant might try an offer promising $5 off $50 – so the customer spends fair bit more, but gets a substantial 25% discount on the incremental $20.  All these offers broadly align interests between customers and merchants – plausibly making both customers and merchants better off than they would be without coupons.  With these benefits, it’s no wonder that digital coupons reportedly saved online shoppers some US$4 billion in 2022 alone.

With digital coupons well established, many customers have been drawn to coupon extensions, browser plug-ins that help users find discounts.  Coupon extensions promise customers a simple benefit: getting the best deal whenever they shop.  If you’re about to buy a $400 laptop, a coupon extension could jump in and tell you there’s a $20 coupon – or even apply it to your cart automatically.  The savings drop straight to the bottom line, and millions of consumers have embraced coupon extensions for this reason.  As of 2025, the most common coupon extensions are Honey, Rakuten, and Capital One Shopping.

The merchant perspective on coupon extensions

For merchants, coupon extensions raise more complicated questions.  Consider the hypothetical customer from the prior paragraph.  If that customer was about to buy the $400 laptop anyway – she already had it in her cart, maybe she had already typed in her address and payment card number – what benefit is there to granting a $20 coupon?  Every dollar of savings for the customer is a dollar of lost revenue to the merchant – probably most of the profit the merchant was going to make on that transaction.  And if the merchant had already spent funds on offline marketing to reach this customer – an ad on TV, or on the side of a bus – then the additional coupon discount could push the sale into a net loss for the merchant.  The fundamental problem is nonincrementality – that by all indications this is a customer who was probably going to buy anyway.

To be sure, coupon extensions could have countervailing benefits to merchants.  Receiving the $20 discount, the hypothetical shopper has a stronger sense of urgency in buying the proposed laptop.  And if other merchants have trained the shopper to expect a coupon on every shop, the absence of a coupon could reduce the customer’s likelihood of buying.  Meanwhile, some coupon extensions even promote competitors: If merchant A won’t offer a discount, the extension may show an offer for similar merchant B.  Facing a risk of competitors’ offers grabbing shoppers’ attention – “conquesting” — merchants have a heightened incentive to participate.

Coupon extensions tend to gather offers from around the web, including offers that are supposed to be limited to specific channels and groups.  Our hypothetical laptop seller might have directed a discount to a specific group – shareholders, retirees, teachers – who it wants to reward with a special deal.  But once a coupon extension gets that deal, the offer will be shown to everyone.  Some analysts blame the merchant; if they really wanted to limit the deal, maybe they should have sent each person a different single-use code.  Still, merchants understandably focus their technical investment elsewhere.  Unauthorized coupon redistribution wasn’t a significant problem until coupon extensions began this approach.  Critics recently reported that one major coupon extension offered to remove coupons a merchant disliked – but only if the merchant agreed to pay that extension an affiliate commission.  Whether or not this tactic is legal, it makes merchants uncomfortable – pressured to join to avoid a problem of the coupon extension’s own creation.

For merchants and normal publishers (those that don’t have coupon extensions), a final challenge is the problem of stand-down.  When a normal publisher sends a shopper to a merchant, the publisher wants a reasonable period of time for that shopper to make a purchase (so the publisher can earn an affiliate commission).  But if the coupon extension jumps in when the customer is about to buy, the publisher won’t get paid – obvious unfairness.  This is a problem for the merchant, too, if it wants to retain quality publishers who insist on being paid for the value they provide.  In response, merchants and tracking networks created “stand-down rules” that guarantee the first publisher a chance – a duration in which the coupon publisher cannot intercede.

How VPT can help

Visible Performance Technologies tests coupon extensions to help merchants protect their marketing budgets and their other affiliate publishers.  Our automation can figure out what coupon codes a coupon extension is promoting, so a merchant can cross-check those codes against limited-distribution codes the publisher is supposed to avoid.  And our automation tests stand-down, to make sure other affiliates get the commission they’ve been promised.  

Concerned about coupon extensions targeting your program?  Learn more about how we test coupon extensions, or get in touch with us.

Unsolicited Coupon Usage

A coupon affiliate marketing program does not intend towards distribution of overpaying and unearned discounts. 

These malicious extensions scrape off coupon codes from eCommerce sites when a user tries to search for a coupon during checkout. All of these coupons are then stacked and made available to the user. 

Consumers who have not earned any coupon codes (via email, newsletter, subscriptions, etc.) will also have access to a variety of coupons via web extensions and exploit them to decrease the AOV of their carts gradually.

How Can Online Businesses Manage Coupon Extensions?

Visible Performance Technologies (VPT) is leading the market of Affiliate Fraud Management & Brand Protection. VPT’s innovative methodology identifies non-compliant behaviors, with nonstop automation searching for cookie-stuffing across the web.  We use multiple types of browsers, computers around the world, and realistic simulated user activity to make sure we catch all kinds of violations.  We track and report the problems we find, making it easy for merchants to clean their programs and increase their affiliate program ROI.

So what are you waiting for? Sit back and let us protect your brand from threat indicators with our high-end brand compliance monitoring tools.