"Every Little Helps" is Tesco's motto but it turns out the supermarket doesn't like it when its customers take the phrase too literally. The retail group, which announced annual profits of £3.8bn last week, has been forced to make another humiliating change to its Price Check promotional campaign after shoppers hijacked the deal and started "recycling" £20 refund coupons "just to make money".

Tesco styles itself as a consumer champion and the marketing push was supposed to demonstrate that its groceries were cheaper than Asda's. Instead the campaign has proved something of an own goal with the promotion taking on a life of its own as savvy shoppers started boasting on internet forums that they had claimed back hundreds of pounds under the scheme.

The original promotion, launched at the beginning of March, was to check the price of comparable groceries bought at Asda against its own and then refund "double the difference" to shoppers if Tesco was found to be more expensive. However, in one example, a customer shopping for MoneySavingExpert.com found that some alcohol, laundry products and pet food were far cheaper at Asda; he spent £126 at Tesco on a shop that would have cost £81 at Asda, and claimed a £90 voucher.

Three weeks into the campaign Tesco started capping refunds at £20 and on Thursday the grocer watered down the benefits again. It said the promotion had unintentionally spawned a "cottage industry" of profit-seekers. Defending the decision to further dilute the terms of the deal, a Tesco spokesman said that while the vast majority of shoppers had used the scheme to check their "normal" shopping others were using it as a money-making venture: "Price Check and 'double the difference' have given rise to a cottage industry of savvy and determined people. We commend their ingenuity and determination, but that wasn't why we set up Price Check."

Tesco, which rings up £1 in every £7 spent on the high street, said it would now only refund the difference between the two shops rather than twice the amount.

The fiasco is an embarrassment for both Philip Clarke, the new Tesco chief executive, and UK head Richard Brasher who was promoted to the new post this year.

This week industry data from Kantar Worldpanel showed that despite its leadership position, with a market share of 30.4%, it had lost sales to rivals including Waitrose and discount chains . At his maiden annual results last week Clarke broke with tradition by serving up some self-criticism. He admitted there had been a "loss of form", but said it would fight back with more product innovation and by "sharpening up" the way its speaks to consumers.

Other blunders

Hoover free flights

Hoover's disastrous free flights offer has gone down in history as one of the biggest promotional blunders of all time. The company's generous offer of two flight tickets to New York to every customer purchasing a vacuum cleaner over £100 led to its being inundated with disgruntled customers when the figures failed to add up. The blunder cost Hoover £48m and resulted in six years of court cases.

Tesco bananas

In 1997, Tesco's offer of 25 clubcard points worth £1.25 for bananas costing £1.17 led one customer to buy nearly 1,000lbs of the fruit. But when Phil Calcott, a physicist, went back to the shop for more staff told him they would not take any more bulk orders. He made a profit of £25.12 on the bananas which he then gave away to passers-by.

Pepsi in the Philippines

Pepsi retracted a promotional offer of 1m pesos to anyone who found a bottletop with the number 349 printed on it in the Philippines, after it emerged that half a million winning bottle tops had been produced. Even after reducing their prize money to $19, Pepsi paid out a total of £13m to customers who thought they were rightful winners and sparked thousands of lawsuits as well as riots and attacks on bottle plants.

Domino's Pizza

Dominos were forced to give away 11,000 free pizzas in the US after someone stumbled upon a trial online promotional code that had been scrapped. News of the code had spread to thousands online before Domino's withdrew the code. Katie Loweth