How Digital Scratch-Off Promotions Help Retailers Move High-Tariff Products Without Slashing Prices

To move high-tariff inventory effectively, retailers must explore innovative marketing strategies.

By Dennis Romano

Tariffs have become an unavoidable reality for many retailers and franchise brands. From imported apparel and electronics to specialty goods and home products, rising tariffs are increasing landed costs and putting direct pressure on already-tight margins.

Instead of discounting, retailers are turning to digital scratch-off promotions to move high-tariff inventory while protecting margins.

Move high-tariff inventory:

Traditionally, retailers respond in one of two ways:

• Raise prices and risk slower sell-through.

• Discount products and absorb margin loss.

Neither option is ideal.

Forward-thinking retailers are choosing a third path—using digital scratch-off promotions to move high-tariff inventory without cutting prices.

The Tariff Problem Retailers Are Facing

Tariffs don’t just increase costs—they compound operational challenges across retail and franchise environments.

Common impacts include:

• Higher wholesale and landed product costs

• Reduced pricing flexibility at the shelf

• Slower inventory turnover on tariff-affected SKUs

• Margin pressure passed down to franchisees.

For franchise brands, the problem is even more pronounced. Corporate teams must protect brand value and pricing consistency, while individual locations feel immediate pressure to move inventory tied up in higher-cost goods.

Discounting may feel like the fastest solution—but it often creates long-term problems.

Why Traditional Discounting Makes the Problem Worse

Price cuts solve one problem while creating several others.

When retailers discount tariff-impacted products:

• Customers become conditioned to wait for deals.

• Perceived product value declines

• Margin erosion accelerates

• Franchise price consistency breaks down.

• Promotions become harder to unwind.

Once customers expect discounts, it becomes increasingly difficult to return to full-price selling—especially across multi-location brands.

Scratch-offs are one of the most effective retail promotions without discounts, preserving price integrity while increasing engagement.

A Smarter Alternative: Digital Scratch-Off Promotions

Digital scratch-off promotions change the equation by incentivizing behavior instead of lowering prices.

Rather than advertising a discount, retailers reward customers after purchase with a chance to win an instant prize. The product price stays intact. The incentive feels exciting, not transactional.

Example:

“Buy Any Two Items – Scratch & Win Instantly”

With digital scratch-offs, retailers can:

• Preserve MSRP

• Drive purchase urgency

• Increase engagement at checkout.

• Control prize exposure with precision

The customer experience feels fun and rewarding—without training shoppers to expect lower prices.

Ideal Use Cases for High-Tariff Inventory

Digital scratch-offs are especially effective for products affected by increased import costs.

Many brands use retail scratch-off promotions to accelerate the sell-through of tariff-affected SKUs without lowering shelf prices.

Slow-Moving Imported Products

• Apparel & footwear

• Electronics accessories

• Home goods

• Specialty food & beverage

Scratch-offs help accelerate sell-through without advertising discounts that devalue the product.

Over-Stocked or Seasonal SKUs

Instead of marking down inventory:

• Use scratch-offs to trigger purchases.

• Rotate prize types instead of lowering prices.

• Maintain perceived value while clearing stock.

Franchise-Wide Promotions

Corporate teams can:

• Define prize structure and odds centrally.

• Please ensure brand and pricing consistency.

• Allow franchisees to execute locally.

• Monitor performance across all locations.

Digital scratch-offs are especially effective for franchise scratch-off promotions, where corporate teams control prize structure while individual locations execute locally.

This balance of control and flexibility is critical for franchise systems under margin pressure.

Why Digital Scratch-Offs Outperform Coupons and Rebates

Scratch-offs shift the focus from price reduction to experience enhancement—a key distinction when tariffs are already squeezing margins.

Prize Strategies That Protect Margins

One of the biggest advantages of digital scratch-offs is the control they offer.

Retailers can:

• Use non-discount prizes (gift cards, free items, loyalty points)

• Set exact winning odds.

• Cap total prize value

• Balance low-cost and high-value rewards.

• Adjust prize mix based on performance.

This ensures:

• No runaway promotions

• Predictable budget exposure

• Better ROI than blanket discounting

Using probability-based prize logic, retailers can cap exposure while still offering compelling rewards.

Even modest prizes feel valuable when delivered through a gamified experience.

Visibility, Reporting, and Smarter Decisions

Unlike traditional promotions, digital scratch-offs generate actionable data.

Campaign data helps retailers refine inventory sell-through strategies based on real customer behavior rather than assumptions.

Retailers and franchise brands gain insight into:

• Participation rates by location

• Prize redemption trends

• Campaign engagement levels

• Inventory movement correlations

This visibility allows teams to refine promotions, optimize prize structures, and apply scratch-offs strategically—not reactively.

Built-in campaign analytics and reporting give corporate and franchise teams full visibility across locations.

Final Takeaway: Move Inventory Without Training Customers to Wait

Tariffs may be unavoidable—but margin damage doesn’t have to be.

Digital scratch-off promotions give retailers and franchise brands a smarter way to:

• Move high-tariff products

• Protect pricing integrity

• Maintain brand value

• Drive engagement without discounting.

Instead of racing to the bottom on price, scratch-offs reward customers while preserving long-term profitability.

See how digital scratch-off promotions work.