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The Toys-R-Us Coupon Fail: How to Prevent Loss on Promotional Offers with Coupon Validation

Analytics, Shopper Marketing, Security, Retail, Business Intelligence, Retail Industry, Digital Promotions

by Jonathan Treiber January 11, 2018

By sending out non-serialized coupon codes, Toys“R”Us unintentionally gave massive discounts to customers, opened itself up for fraud, and damaged its bottom line.

Unprotected Promotional Offers Lead to Huge Losses

Just before the Thanksgiving and Black Friday weekend, Toys-R-Us emailed coupon codes to a list of its credit card holders for discounts of 15%, 20% and 25% off.

With shoppers on the lookout for discounts just before the holidays, the codes quickly went viral. Through trial-and-error, shoppers also realized that the codes could be combined for a massive 60% discount on an order.

Toys-R-Us, realizing the mistake, cancelled online orders and upset many customers who shared their negative experience and opinions online. Those who placed online orders for in-store pickup were able to secure the discounted prices and receive their merchandise. This led to huge losses by the retail giant, as well as damage to their reputation.

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Many popular retailers frequently use unprotected coupon codes to provide discounts. They risk huge losses, cancelled orders, and angry customers. So what should Toys-R-Us and other retail chains do for smarter, safer digital promotions?

The Solution: Protect Your Promotional Offers with Dynamic Barcodes

Advertisers can distribute e-commerce promo codes through various channels, but these codes are often not single-use due to point-of-sale limitations.

As a result, retailers are unable to manage overuse of coupons, or effectively track unique redemptions to gain customer insights. So, how can brands control excessive redemption AND successfully measure the impact of their digital marketing efforts?

The key is to use personalized coupon codes. By nature of being trackable and individualized, serialized codes are more secure.

For example, the Coupon Validation API from RevTrax allows retailers to utilize single-use codes for e-commerce POS systems. This solution prevents misuse of promotional offers by:

  • Generating a batch of unique codes (“1J78X9”) related to the retailer’s coupon code that can only be used once.
  • Enabling dynamic expiration dates so that the code could not be used after a certain established date.
  • Activating a real-time call to the RevTrax web service, in order to validate the code at checkout.

These serialized codes would have allowed Toys-R-Us to monitor digital promotion budgets, mitigate overuse, and prevent abuse with dynamic tracking and analytics. 

Learn more about serialized codes: Get in touch with a RevTrax specialist and discover how you can efficiently distribute digital promotions and successfully measure the ROI of your campaigns.

Prevent coupon fraud and successfully measure the impact of your digital  marketing efforts, contact RevTrax today.



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