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'Fat finger discounts' cost us all

Sometimes a special price or online coupon code is clearly a mistake. These great deals can mean higher prices later on.

By Donna_Freedman Jun 4, 2013 9:26AM
Logo: Couple Making Online Purchase (Fuse, Getty Images)While reserving a tee time online a Minneapolis-area blogger was asked if he had a promo code. Just for fun he made one up. To his shock, the $80 reservation fee disappeared and an onscreen message congratulated him on getting free golf for one year.

Aaron, who blogs at Three Thrifty Guys, was tempted. Really tempted, since the sport is a pricey pastime. "I hate paying for golf," he admits.

Ultimately he decided that accepting the offer would have felt like "stealing." So Aaron let management know how easy it had been to guess the code, which apparently was created for winners of a contest. (It was quickly deactivated.)

He stood to profit hundreds or even thousands of dollars, depending how often he played. Was Aaron stupid not to have taken advantage of this "free" offer?

Not stupid -- honest. The code was not intended for him and he knew it.

The Internet has made it possible to share tips on finding the best prices, such as clearance sales or cash-back shopping deals. Sometimes those tips are clearly mistakes, e.g., the typos known as "fat finger discounts" (more on those in a minute). Sometimes they're actually illegal, as with coupon bloggers who promoted "barcode decoding," or using coupons for products other than those pictured.

But even if you're not actually breaking the law you're certainly bruising our collective sense of ethics. Exploiting a loophole or taking advantage of a deal that's obviously a misprint might make you feel like a really slick dealer. It’s easy to convince yourself that you're "sticking it to The Man" or that "Company XYZ makes millions -- my little purchases don't matter."

But unethical use of coupon codes can have the same effect as shoplifting or the purchase of items with stolen credit cards: The retailer loses money and passes those losses along to consumers in the form of higher prices.

A marketing plan

It's not uncommon for online shoppers to enter FREESHIP or FREESHIPPING at checkout in the hopes of not having to pay for postage. Sometimes this works. However, it's smarter to check sites like CouponCabin.comRetail Me Not and Savings.com, where you may get coupons as well as free shipping codes.

These e-codes exist for the same reason paper coupons do: to get people to go shopping. Many are designed to be shared freely through sites like the ones mentioned above.

But some are unique, i.e., intended for a specific region or type of customer (e.g., high-spending shoppers or those who subscribe to a retailer's newsletter). Sharing these discounts defeats the company's marketing plan, according to Stephanie Nelson of CouponMom.com.

 

"And if it blows their marketing budget, you can be sure they won't issue the coupons again,” Nelson says.

Retailers are finding ways to protect themselves, such as adding serial numbers to one-time-use codes. Sometimes this doesn't work, as with JCPenney’s recent "$10 off $10 or more" e-coupon: Although it had a unique code, the website initially honored multiple uses.

Once the glitch went viral you can imagine the explosion of $10 online orders that ensued. I skimmed one deal site's forum thread in which people wrote gleefully of ordering dozens or even scores of items cheaply or free.

They wailed when the retailer eventually caught on. In a fairly stunning disconnect, one person moaned that the folks who ordered multiple items were calling attention to the practice and would therefore "ruin it for everyone else."

Never mind that others (or maybe you) will pay for this later on in the form of higher prices. Right now people want theirr free bath towels.

Why you should care

According to Brian Hoyt of Retail Me Not, seeking loopholes in non-unique promo codes is similar to taking advantage of misprints known as "fat-finger discounts." For example, a reasonable person would know you couldn’t get a flight from Canada to Cyprus for $34.

"The consumer needs to figure out how to act ethically," Hoyt says.

For Earth Day 2012 Sony offered a $150 credit toward a new laptop if you brought in an old one to recycle. Employees at some stores misunderstood and gave out $150 gift cards good for anything in the store. The same deal site mentioned above had a forum thread in which deal hounds urged others to take advantage before corporate wised up.

"Time to rob Sony," one of them exulted. Another noted that the $150 credits could be sold on eBay.

Fortunately, most people don't abuse codes. But "there will always be people who are looking to hack the system, or look for a little crack they will exploit," says Brian Lee of Savings.com.

"It is exciting to a certain segment of the population to get something that (they) don't deserve."

More on MSN Money:

1Comment
Jun 4, 2013 2:34PM
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Saying "the consumer needs to figure out how to act ethically" presumes they are not just out for Number #1.  It's like watching coverage of a riot - some are there to protest, while others are there to break in to stores and "get away with" whatever they can.  Good last quote from Brian Lee.
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