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The Dangers of Promoting on Social Networks

Posted on June 5, 2008 by Archives

A Great, but Simple Promotion

When you are in business to sell products online, you may be after such things as more sales, increased internet traffic, and online communities touting your site as a great deal and encouraging people to buy from you. And usually these are good things. But as we found out recently, sometimes you have to be careful about what you wish for. An example of this is the Omaha Steaks promotion that we had just initiated, a promotion that had been highly successful and was well-received.  A little too well-received, actually, and that caused a few tense hours over a recent weekend.

Our Omaha Steaks promotion was simple: when you make a purchase from us, we’ll send you a gift certificate in the form of a coupon code for $20 off your Omaha Steaks order, which we sent along in the order confirmation email. We had partnered with Omaha Steaks, purveyors of fine steaks and other food products, to provide this great value to our customers. This seemed to be a great promotion, and all was running smoothly until it got SlickDeal-ed.

Deal Wars: When Slickdeals Strikes Back!

Slickdeals.net is a great site for sharing, finding, and aggregating deals. I am a frequent visitor of the site, and have made some great buys based on deals I’ve found there. Slickdeal-ers tend to be a savvy bunch who really know how to game the system. They are a great source of information about products, pricing, and great buys.

So when a Slickdeal-er made a purchase from our site and instantly got their free $20 Omaha Steaks gift card in their order confirmation email, a light went on. They posted this great deal onto SlickDeals.net and pretty soon the frenzy began. The Slickdealers searched our site, found the cheapest item they could with free shipping, and began placing orders. One guy even placed over 60 orders! Being the sophisticated online retailer that we are, we allow customers to easily cancel orders that haven’t shipped. Since this happened on a Saturday, customers were able to place orders, receive their coupon codes instantly via email, then cancel their orders and repeat the process over and over again.

While we are all for good deals, we felt it wasn’t fair to our promotion partner to give away these gift certificates to fraudulent consumers whose only goal was to sell them on eBay. So after some discussion, we decided the best course of action would be to send out the coupon code after we knew the order wouldn’t be cancelled rather than instantly. Our terms of use stated that the offer was only good on non-cancelled orders, so those who placed orders then cancelled were not sent the coupon code.

Lessons Learned

This was a great lesson for us in the value of community sites as well as their potential dangers. While we loved the idea of our site getting a lot of notice and exposure, we also learned that we have to protect ourselves from situations that can spiral out of control. Rest assured, while our next promotion or deal may be a “slick deal”, we will take measures to prevent an incident like this from occurring again.

 

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