New Delhi, February 22: A Delhi-based sneaker startup has revealed how a newly hired employee allegedly misused internal systems to generate 100% discount codes, ordering footwear worth nearly ₹2 lakh before quitting within a week of joining.
How the Coupon Scam Unfolded
The incident came to light after Arjun Singh, co-founder of Delhi-based sneaker design house Gully Labs, shared details of the episode on social media platform X. According to Singh, the employee joined the company in a customer service role and quickly exploited backend access.
Within the first week of employment, the individual allegedly generated multiple 100% discount coupons and used them to place orders for friends and family members. The total value of these orders amounted to approximately ₹2 lakh.
Soon after placing the orders, the employee resigned from the company.
Partial Recovery and Legal Threats
After discovering the misuse, the company contacted the former employee and sought the return of the products or reimbursement for the loss. Singh stated that the employee initially agreed to cooperate and returned nearly half of the footwear.
However, the remaining items had reportedly already been used or distributed. Matters escalated when the ex-employee allegedly began sending legal notices to the company, accusing it of harassment in response to its demand for compensation.
The episode left the startup dealing not only with financial loss but also legal complications.
Security Concerns in Growing Startups
The incident has sparked conversations in entrepreneurial circles about internal security and employee access controls. Singh was responding to another entrepreneur who highlighted the increasing challenges brands face as they expand operations.
As companies scale, access to sensitive customer data, order systems, and backend controls becomes critical. Without proper checks and safeguards, internal misuse can result in significant losses.
Industry experts advise startups to implement role-based access systems, periodic audits, and stronger digital controls to prevent such fraud. Guidance on cyber and digital safety for businesses is available through the Ministry of Electronics and Information Technology (https://www.meity.gov.in).
Social Media Reacts
The post quickly gained traction online, with several users sharing similar experiences from India’s startup ecosystem. Some described it as a reflection of trust issues in rapidly growing organisations.
One user claimed that misuse of employee discount policies had earlier affected major e-commerce players. While such claims remain anecdotal, the discussion has underscored the importance of internal governance.
Business advisors suggest that beyond technical safeguards, companies must also invest in structured onboarding, clear contractual terms, and compliance frameworks. The Ministry of Corporate Affairs (https://www.mca.gov.in) provides regulatory guidance for companies operating in India.
Lessons for E-Commerce and Retail Brands
The Delhi sneaker firm’s experience highlights a broader vulnerability in digital retail operations. Discount codes and promotional systems are designed to attract customers, but if not monitored, they can be exploited internally.
Startups, particularly in the direct-to-consumer space, often prioritise growth and customer acquisition. However, internal controls sometimes lag behind operational expansion.
Entrepreneurs say the key takeaway is to balance trust with accountability. Implementing layered approval systems for high-value discount codes and maintaining transaction alerts can significantly reduce risks.
A Wake-Up Call for Founders
For many startup founders, the episode serves as a cautionary tale. While building innovative brands and focusing on market expansion, internal vulnerabilities can undermine hard-earned progress.
As India’s startup ecosystem continues to grow, incidents like these emphasise the need for stronger compliance structures, transparent policies, and ethical work culture.
The Delhi firm has since indicated that it has strengthened its internal safeguards to prevent similar incidents in the future.
