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Its handy Price Check tool was supposed to show customers that Tesco prices were cheaper than Asda's and the store promised to refund 'double the difference' on those that weren't.
But with consumers across the country looking to save money wherever possible, shoppers found ways to take full advantage of the offer.
By finding products on cut-price short-term promotions at Asda, cash-strapped shoppers were able to claim money back at Tesco, sometimes grabbing hundreds of pounds a week in refund vouchers.
Tesco's response was to cap the value of refunds at £20 a week but it has now been forced to scrap the scheme altogether.
A spokesman told the Daily Mail: "Price Check and Double the Difference have given rise to a cottage industry of savvy and determined people.
"They identify products which are on short-term promotion in Asda then buy them at Tesco, claim the coupons through Price Check, buy more of the same products with the coupons and go on recycling coupons in this way just to make money.
"As we've said before, we commend their ingenuity and determination, but that wasn't why we set up Price Check."
However, the supermarket still plans to offer customers a refund matching the price difference between an Asda basket and a Tesco basket.
The spokesman added: "It is still a commitment, and we remain as determined as ever to providing transparency on prices and to reimbursing the few customers who might find their shop was on that rare occasion cheaper at Asda."
Responding to the news with some satisfaction, an Asda spokesperson said: "Clearly they found it hard to make a promise they couldn't keep."
What do you think? Are Asda winning their price battle with Tesco? Leave a comment below...