Merchants Not Allowing Voucher Code & Cash Back Websites?

[averasolutions]

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Okay so about two weeks ago we received an email from an Affiliate Window merchant stating that they are not allowing "Voucher Code Only" websites any more.

I can't remember which merchant it was, but I'll try and dig out the email.

This slightly worries me, is this where it starts - are they next going to pull their program from all sites, say that offers voucher codes?

Also we are developing a new website and spending quite a bit of time building in voucher code functionality, so does this mean that we are completely wasting our time doing so?

I understand that some Merchants have to be vigilant about where their products/services are promoted but why would they be so pedantic about this?

- and surely they realise that some of the voucher code websites are the only reason the customer is on their website in the first place, so they're not just going to loose the odd sale here and there, but a great deal of browsing traffic too!

Do they just not care - or are they trying to simply get out of paying commissions to the voucher code sites because they generate a load of sales?

[Colin@DVDTimes]

- and surely they realise that some of the voucher code websites are the only reason the customer is on their website in the first place, so they're not just going to loose the odd sale here and there, but a great deal of browsing traffic too?

I doubt that's the case at all - most people who visit voucher sites are looking for codes for a specific retailer. They know what they want to buy and who from, but are looking for the best price.

I doubt very many people at all spend their time browsing the voucher sites and using that as a basis for their purchases.

Do they just not care - or are they trying to simply get out of paying commissions to the voucher code sites because they generate a load of sales?

Most of these sales would have taken place even if the voucher site wasn't in the mix.

[bapages]

I dont understand not allowing VC sites, as you just dont issue one if you want to restrict it.

[averasolutions]

I doubt that's the case at all - most people who visit voucher sites are looking for codes for a specific retailer. They know what they want to buy and who from, but are looking for the best price.

Most of these sales would have taken place even if the voucher site wasn't in the mix.

I guess as a website developer, I didn't really consider it that way - I just see it from the sheer amount of traffic that some of our existing websites send to merchants.

So, does that mean that retailers recognise that the sale would happen whether there's a voucher code available or not and simply look at it from the business perspective that the voucher codes just create an unnecessary dip in their GP?

To be honest, I'm just trying to understand the value of the voucher code platform before we really plough time/energy=money into it if there is no real reason to.

[chrisuk]

I think the problems arise when things go mainstream and everyone wants a slice. I am guessing when there were only a couple of VC sites no one even blinked. Now there are loads so the merchants and the network traffic police feel they have to stick their beaks in. So long as the model is still viable you need to work around obstacles wherever possible.

[BFG 9000]

I dont understand not allowing VC sites, as you just dont issue one if you want to restrict it.

What if you want to use them in other channels?

[DannyW]

@averasolutions

Faith I think or a similar Faith brand?

[gamer1810]

Hi

I thought I would throw my 2p's worth in on this..

I am no Affiliate expert (we are just setting up our first program), but as a business owner, the general widespread issuing of voucher codes just seems madness to me..

Heres an example. I was looking for a present for my girlfriend and found a site which was mentioned on this forum. Found a present and then thought, I know I will see if I can find a voucher code..

One minute later I had a code for 10% off! So that merchant lost 10% revenue for no reason - I was going to buy anyway. 10% revenue is a big chunk of thier profit on that sale.

My view is that more and more merchants will be reviewing the impact of voucher codes and start to restrict thier use..

We dont even have an affiliate scheme, but I know we have customers searching for voucher codes to use on our site, why would we just give profit away like that?

OK, now I am ready to be flamed by the supporters of Voucher Codes! Go ahead do your worst!

[Paul Wright]

Think about it from a merchants point of view.

Lets say a merchant is paying commission on a lead/completing a form/recruiting a member etc.

What value to the merchant is somebody driven from a cashback site who's only filling in the form to get cashback and doesn't care less about the product they're signing up for?

For this reason it makes perfect sense for merchants not to partner with incentive based traffic and only value added content based sites.

Paul

[averasolutions]

@averasolutions

Faith I think or a similar Faith brand?

Yeah I think it might have been that retailer.

Hi

Heres an example. I was looking for a present for my girlfriend and found a site which was mentioned on this forum. Found a present and then thought, I know I will see if I can find a voucher code..

One minute later I had a code for 10% off! So that merchant lost 10% revenue for no reason - I was going to buy anyway. 10% revenue is a big chunk of thier profit on that sale.

It is a huge chunk to be taken out of a retailer's GP...

...but were you looking for that product cheaper, so therefore were you searching for a voucher code for that site in your price research? or were you specifically looking for a voucher code for that website?

Thing is - if you hadn't found that voucher code, would you DEFINATELY have purchased from that store? ...even if you had found the same item for a cheaper price elsewhere?

Or, was it the voucher that made that store the cheapest?

So this is my point - are people specifically searching for voucher codes or are they looking for the best price?

We have worked out that it could take us around 6 weeks to properly implement voucher code functionality (the way we want to do it) and that's a great deal of time and investment.

I know that everyone has their own opinion when it comes to voucher codes, but is there any actual factual research to answer any of the above questions?

[Hero]

Think about it from a merchants point of view.

Lets say a merchant is paying commission on a lead/completing a form/recruiting a member etc.

What value to the merchant is somebody driven from a cashback site who's only filling in the form to get cashback and doesn't care less about the product they're signing up for?

For this reason it makes perfect sense for merchants not to partner with incentive based traffic and only value added content based sites.

Paul

No, this means that the merchant who pays on a CPL basis should consider whether to partner with cashback sites and if yes, on what basis. That doesn't mean that CPA retail programs should ban cashback.

As with every affiliate out there - the merchant needs to evaluate who they want to work with and on what model - you don't need to partner with everyone on the same basis.

[Paul Wright]

No, this means that the merchant who pays on a CPL basis should consider whether to partner with cashback sites and if yes, on what basis. That doesn't mean that CPA retail programs should ban cashback.

As with every affiliate out there - the merchant needs to evaluate who they want to work with and on what model - you don't need to partner with everyone on the same basis.

Hero, you've misunderstood me. I'm not suggesting CPA retail merchants ban cashback at all. I didn't mentioned CPL, CPA or specifc vertical. I'm talking about affiliate programmes in general regardless of metric or sector. I'm merely pointing out an example of when a merchant might want to restrict incentivsed activity.

For sake of clarity let me use a more detailed but hypothetical example.

TotalJobs.com reward affiliates commission on completed CV uploads and chose not to partner with incentivised traffic sites (whether this be vouchercode, cashback etc). In this scenario I can see why a merchant would chose to restrict this type of activity. You could also argue that there's no need to actually restrict this activity as these types of sites aren't suitable anyway however given that certain voucher code sites go as far as to list every merchant under the sun (even if they don't have an affiliate programme or voucher codes) just to gain traffic I feel the restrictions are in fact necessary to avoid any affiliate/client conflict.

Paul

[aaclapham]

I am 99% content sites however added a niche voucher code site as I didn't want to lose any sales to the customers who then went looking for a code.

The voucher code site only gets a couple of sales a day and it is only there until there is a definative answer on the way forward for voucher codes sites, however I am now getting emails saying if I have a VC site some merchants will cut commission.

So if I don't have a code site I lose sales and if I do have one I lose commission - Great :td

(I personally would remove all voucher codes and stick to one off sale days providing we are given enough notice to promote them).

[Hero]

Hero, you've misunderstood me.

you're using an example and then make a generalised statement based on this example: "For this reason it makes perfect sense for merchants not to partner with incentive based traffic"

Each merchant has different needs - each merchant needs to define who to partner with based on those needs.

I also don't agree with your statement that voucher sites offer incentivised traffic. There is a very clear distinction between promotions and incentives and we shouldn't mix them up.

[Shane]

Do they just not care - or are they trying to simply get out of paying commissions to the voucher code sites because they generate a load of sales?

the question is do they really GENERATE a load of sales ?.. I don't doubt that they do generate sales in volume but (like brand bidding group pcc) in far too many of those instances it's a bit like paying commission to the leaflet dropper when he's stood in your shop doorway handing leaflets out to those walking in store already....people would be turning up at the counter to buy with leaflets but it's not 100% business generation is it.. they were already heading in to buy in the first place in most cases.

sure people do go online.. seach for "ink jet discount" and end up on a discount site then take what they find.. but a hell of a lot more end up on an ink cartridge site, see "enter discount code" box and the go hunting for the "inkjet site name discount code" to stick in there.. it's not really 100% sale generation is it.

before all the voucher code sites jump down my throat, yes I do agree there is genuine, generic traffic out there and they do have their place in the mix but it's a model that affects PPC and SEO affiliates detrimentally and needs some other renumeration model in place in my opinion...