SheerID, which provides a solution that verifies whether consumers taking part in a promotion are qualified to do so, said its research suggested that the growth of targeted discounting, while strong, might be hampered by fraud.
The company released a survey involving 76 companies in the United States that looked at exclusive promotions, their bottom line impacts and their effect on loyalty programs.
According to the survey, SheerID stated, 75% of responding companies sacrifice margins to offer exclusive discounts and 84% of those companies plan to offer promotions in 2017, with 64% already offering or planning to launch exclusive promotions to customers such as students, teachers and military members.
At the same time, 63% of the businesses surveyed noted that they offer promotions year-round. Of those that do, 68% offer the promotions online, 39% in-stores and 37% on mobile devices.
However, the study demonstrated that the majority of the companies studied verify their customers through coupon codes, via email or by manually checking ID’s, all of which are highly vulnerable to fraud, SheerID pointed out.
Of those surveyed companies not offering directed discounts, the majority said their primary reasons for passing on such exclusive promotions were not having enough time, a lack of IT resources, slim margins and the risk of discount fraud. When asked if they would be more likely to offer exclusive promotions if they knew only qualified customers would have them available, almost half said yes, SheerID added.