RetailMeNot’s Fake Coupons Harm Brands and Consumers

Battle lines are finally being drawn between major retailers and the infamous RetailMeNot coupon aggregator website. Resentment towards the site and others like it has been simmering for years, largely because of the subversive way they capture or divert leads from retailers.

Now, this frustration has finally boiled over, and RetailMeNot is being sued for soliciting coupons of retailers without their consent in violation of intellectual property laws.

Mary “This Is Totally Not O”Kay

Cosmetics giant Mary Kay is heading the lawsuit. The company encountered problems over the years when customers would see RetailMeNot’s coupons and were unable to redeem them.

Central to this issue is that Mary Kay is a multilevel, direct marketing company that does not retail its products to the public in a traditional way. Instead of simply stocking items on a shelf, Mary Kay has representatives in the form of “independent beauty consultants,” or IBCs, who meet directly with customers to help tailor their purchases to fit their skin tone, fashion preferences and lifestyle.

When potential customers see coupons on a site like RetailMeNot, they get the false impression that they can simply order the items without an IBC — and with a hefty discount at that. This process disrupts the entire sales funnel of Mary Kay, and it frustrates customers who must be told “no” or that they are essentially wrong for requesting these coupons to be honored. In the end, Mary Kay’s brand is damaged and so is its relationships with customers.

A Wedge Between Leads and Sales

Mary Kay may be the only party currently suing RetailMeNot, but plenty of other brands are sharing their ire. Customers who find these coupons tend to get the wrong impression about brands and their products. Third party coupon websites are financially motivated to publish all working and non-working deals (even coupons that are meant for a specific person or group), and they short circuit carefully-planned steps within the customer journey.

Worse, many of these coupons are 100% fake or completely useless to the average customer. Often, they were one-time use promotions, extremely limited offers or regional specials designed to forge a relationship with a particular market segment. Scattering these coupons with no regard for these special criteria and/or target audience can not only create false impressions, but it completely removes the context the coupons were offered in.

For example, if an auto shop wants to honor long-time customers, it can send out direct mail coupons as a form of surprise and delight. The recipient opens his mail to see a message that says something like “because we value our relationship and you have been such a good customer, here is a free tire rotation with your next oil change! Stay safe this summer!” The message creates a direct affinity between brand and customer, and it serves a highly-specific marketing purpose.

Now, imagine some other customer simply seeing a coupon code online and trying to redeem it at the auto shop. That customer would hear a reply like, “sorry, sir. You have to open an account with us and have it activated for X amount of years before you can use this coupon.”

Customers who hear this response would likely feel tricked or outraged that the company would require them to “jump through so many hoops.” In reality, the offer was never really on the table to begin with, except to a highly targeted customer. This scenario illustrates why RetailMeNot has done so much damage to brands and customer relationships.

Recapturing Your Market

While fighting directly against RetailMeNot is a noble act on the part of Mary Kay, not every brand has the resources to wage such a battle. In order to prevent damage to their brands and to reinstate the necessary steps of their sales funnel, most other companies will have to seek alternate methods to redirect customers away from coupon sites towards their own branded offers.

Thrive Commerce has created a white label deal management platform for just such a purpose. We help retailers win and convert droves of customers who are searching online for deals around their brand. We help our brand partners keep customers on their pages and recapture them through strong SEO optimization and performance. Our tools help brands fight back against 3rd party middle men that short-circuit customer service and relationships. Visit our web page to learn more.

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